Amazon’s ambitions to establish nuclear-powered datacenters in the U.S. encountered a significant hurdle as a recent proposal was blocked by regulatory authorities. The Federal Energy Regulatory Commission (FERC) dismissed a proposal that would enable Amazon to extract more power from the Susquehanna plant, citing potential threats to grid reliability and increased energy expenses. The original plan intended to escalate the load at the site from 300 to 480 megawatts, but objections from American Electric Power and Exelon prompted the FERC’s move.

These utility companies raised concerns that the revised arrangement would allow the datacenter, operated by Amazon’s AWS, to receive preferential treatment, risking a reduction in grid-distributed energy. The controversy caused FERC to reject the agreement, marking a caution against setting a precedent for similar future deals.

The decision highlights the expanded energy needs of modern datacenters, essential for evolving technologies such as AI, which require significant power levels. On the other hand, it raises questions about the implications for both power companies and technology firms in achieving a balance between innovation aspirations and electricity grid stability.

FERC Chairman Willie L Phillips expressed dissent, indicating the decision could impede both electric reliability and national security. Meanwhile, Amazon plans to press on with innovative, zero-carbon energy solutions alongside partners like Talen Energy to energize datacenter operations in the U.S. Future projects may include investments in compact nuclear technology, which Amazon has backed with a recent substantial financial commitment.