Docket Nos. ER24-2172-000, ER24-2172-001
I respectfully dissent from today’s order because it is a step backward for both electric reliability and national security. The amended Interconnection Service Agreement among PJM, Susquehanna Nuclear, LLC and PPL (Amended ISA), represents a “first of its kind” co-located load configuration that presents precisely the sort of specific reliability concerns, novel legal issues, and other unique factors that should have justified the filing of a non-conforming interconnection agreement.[1] I would have accepted the Amended ISA and also required PJM to submit regular informational filings to provide transparency into the arrangement’s operations over time, including certain of the issues in dispute, such as back-up service. That approach would also have allowed PJM to go through a further stakeholder process for tariff revisions and decide on generic next steps regarding these important issues in the months ahead.[2] In failing to accept the agreement, we are rejecting protections that the interconnected transmission owner says will enhance reliability while also creating unnecessary roadblocks to an industry that is necessary for our national security.
Electric reliability is the Commission’s job number one. And I believe that PJM addressed those issues comprehensively in its filing. PJM supports its application with a detailed analysis of the reliability implications of adding an incremental 180 MWs on top of the already-allowed-for 300 MWs, and concludes that up to 480 MWs, no transmission upgrades are required.[3] In addition, the application adds several important, reliability-based belts and suspenders. Those include installing a protection scheme to ensure that the Co-Located Load separates in the event of loss of generation output to ensure no power flows from transmission facilities to the Co-Located Load, providing certain generator shutdown and automatic tripping data to PPL, and notifying PJM and PPL in the event of any equipment malfunction. In short, I believe that these measures would have improved the reliability picture while also not prejudging future filings or foreclosing Commission flexibility in the future.
Today’s order also creates a national security risk.[4] There is a clear, bipartisan consensus that maintaining U.S. leadership in Artificial Intelligence (AI) is necessary to maintaining our national security. Maintaining our nation’s leadership in this “era-defining” technology will require a massive and unprecedented investment in the data centers necessary to develop and operate those AI models.[5] And make no mistake: access to reliable electricity is the lifeblood of those data centers. I am deeply concerned that in failing to demonstrate regulatory leadership and flexibility we are putting at risk our country’s pole position on this critically important issue. That is simply unacceptable.
I do not mean to suggest that these issues are easy. To the contrary, they are complex and require us to wrestle with a host of challenging, multifaceted issues. That is why we held a technical conference today, to build a record on how the Commission should address similar issues going forward. But the technical conference casts a far wider net than the matter that is before us today and was never intended to defer judgment on this application, which I believe has thoughtfully and creatively addressed the factors that justify approval of these non-conforming provisions.
As always, I am particularly concerned about issues of affordability, particularly ensuring that data centers, like every other customer, pay their fair share of the costs of maintaining a reliable electric grid. To that end, I believe it is important to continue considering these issues, including co-location’s implications for the transmission system and the provision of ancillary services, both before this Commission and in the PJM stakeholder process. In addition, as a former state regulator, I will be similarly focused on working with our state partners to address the issues that lie at the confluence of federal and state jurisdiction. But I do not believe that any of those issues, as important as they are for further consideration, justify the Commission’s rejection of the Amended ISA.
At the end of the day, I am concerned that the arguments the Commission relies on to reject the Amended ISA lead it to miss the forest for the trees. We are on the cusp of a new phase in the energy transition, one that is characterized as much by soaring energy demand, due in large part to AI, as it is by rapid changes in the resource mix. Ensuring reliable and affordable supplies of electricity throughout the coming period of increasing demand and changing supply will require pragmatic leadership that facilitates that transition. If we instead throw up roadblocks to that transition, as I am concerned today’s order does, we will only deprive our country of the resources needed to ensure our continued economic prosperity and national security.
For these reasons, I respectfully dissent.
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Willie Phillips
Chairman
[1] Although the Commission generally requires transmission providers to offer their customers interconnection service consistent with the pro forma LGIP and LGIA, the Commission has recognized that there would be a small number of extraordinary interconnections that present unique factors, such as reliability concerns or novel legal issues, which justify non-conforming provisions. Midcontinent Indep. Sys. Operator, Inc., 177 FERC ¶ 61,233, at P 26 (2021); PJM Interconnection, L.L.C., 111 FERC ¶ 61,163, at P 10 (2005). Contrary to the assertions in today’s order, the existence of an informational Guidance Document related to co-located loads does not change the fact that non-conforming provisions of the Amended ISA are necessary to reflect the specific characteristics of this particular interconnection. There is no indication that the provisions of the Guidance Document the majority highlights will, or even should, apply to all co-located arrangements.
[2] Amended ISA, Schedule F, Part F, § 8 (“The provisions in this [ISA] are subject to change in accordance with Section 22.3 of Appendix 2 to this Agreement pursuant to Section 205 and Section 206 of the [FPA] and/or FERC’s rules and regulations thereunder, including but not limited to PJM’s right to assess in a non-discriminatory manner additional rates, terms or conditions which may include transmission or ancillary services charges.”).
[3] PJM’s necessary study concludes that no transfer above 480 MW would be allowed until Susquehanna makes upgrades to mitigate generation deliverability violations. See PJM Transmittal at 5-6.
[4] Constellation and Vistra Answer at 3 (“The corresponding technological advancement [driving data center growth] is critical to America’s competitiveness and our national security and thus building out our digital infrastructure has been a focus at both the federal and state levels.”); id. at 4 (“National security experts warn ‘as global powers vie for technological supremacy, the United States faces a critical challenge: to lead in AI or risk falling behind in a domain crucial to future conflicts and international competition.’”).
[5] Memorandum on Advancing the United States’ Leadership in Artificial Intelligence; Harnessing Artificial Intelligence to Fulfill National Security Objectives; and Fostering the Safety, Security, and Trustworthiness of Artificial Intelligence, THE WHITE HOUSE (Oct. 24, 2024), available at https://www.whitehouse.gov/briefing-room/presidential-actions/2024/10/24/memorandum-on-advancing-the-united-states-leadership-in-artificial-intelligence-harnessing-artificial-intelligence-to-fulfill-national-security-objectives-and-fostering-the-safety-security/#:~:text=Leadership%20in%20responsible%20AI%20development,growth%2C%20and%20avoiding%20strategic%20surprise (last visited Oct. 30, 2024); Readout of White House Roundtable on U.S. Leadership in AI Infrastructure, THE WHITE HOUSE (Sept. 12, 2024), available at https://www.whitehouse.gov/briefing-room/statements-releases/2024/09/12/readout-of-white-house-roundtable-on-u-s-leadership-in-ai-infrastructure/ (last visited Oct. 30, 2024).