Amazon has announced a $20 billion investment in two data center complexes in Pennsylvania, marking what Governor Josh Shapiro called the largest private sector investment in the state’s history. The announcement was made at a news conference in Berwick, near the Susquehanna nuclear power plant, where one of the data centers is being built. The other complex will be located in Fairless Hills at the Keystone Trade Center, a former U.S. Steel mill site.
Data Center Locations and Power Supply
One data center is being constructed adjacent to the Susquehanna nuclear power plant in northeastern Pennsylvania. This facility will draw power directly from the nuclear plant through a ‘behind the meter’ connection, a arrangement that has drawn scrutiny from the Federal Energy Regulatory Commission (FERC). The other data center, located in Fairless Hills, will receive its power through the electricity grid.
Economic Impact and Incentives
The project is expected to create significant construction jobs and generate substantial tax revenue for local governments. Governor Shapiro emphasized the economic benefits, stating that the investment will help ‘rebuild those communities and invest in them.’ Pennsylvania is offering incentives, including $10 million for training programs and a sales tax exemption on data center equipment purchases. The state hopes these incentives will help attract and retain the data center industry.
Industry Trends and Implications
The investment is part of Amazon’s broader infrastructure expansion to meet growing demand for artificial intelligence and cloud computing services. The company has committed similar investments to data center projects in other states, including Mississippi, Indiana, Ohio, and North Carolina. The deal also follows a trend of tech companies partnering with nuclear power plants to secure energy for their data centers, with Microsoft recently agreeing to restart a reactor at the shuttered Three Mile Island nuclear power plant.
Controversy and Regulatory Scrutiny
The ‘behind the meter’ power arrangement between Amazon and Talen Energy, the owner of the Susquehanna nuclear power plant, has raised concerns about diverting power to higher-paying customers and the potential impact on grid stability. FERC has blocked the deal on procedural grounds, and the matter is pending further review. Critics argue that such arrangements could leave other consumers with insufficient power and unfairly exempt large users from grid improvement fees.
As the data center industry continues to grow, driven by the increasing demand for AI and cloud computing, states like Pennsylvania are competing to attract these large investments with promises of incentives and favorable regulatory environments. The outcome of Amazon’s deal and others like it will likely shape the future of the industry and its relationship with energy providers.
