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On Monday, Amazon announced its plan to invest $20 billion in two data center complexes located in Pennsylvania, one of which is being constructed adjacent to a nuclear power plant that has attracted federal attention due to its arrangement to essentially connect directly to the power plant.
Kevin Miller, the vice president of global data centers at Amazon’s cloud computing division, Amazon Web Services, informed The Associated Press that the company will also establish another data center complex just north of Philadelphia.
One of the data centers is being developed next to the Susquehanna nuclear power plant in northeastern Pennsylvania, from which it plans to source its power. The second facility will be situated in Fairless Hills at the Keystone Trade Centre logistics campus, on a site that was formerly a US Steel mill. Amazon indicated that this data center will obtain its power through the electricity grid.
At a press conference held in Berwick, near the power plant, Governor Josh Shapiro described this as the largest private sector investment in Pennsylvania’s history. He remarked that Monday’s announcement is “just the beginning,” as his administration collaborates with Amazon on further data center initiatives in Pennsylvania.
While some critics argue that data centers create relatively few jobs and have limited long-term employment benefits, proponents contend that they necessitate a significant number of construction jobs, contribute substantial amounts to local vendors, and generate considerable tax revenue for local governments. Shapiro emphasized the construction work that will engage members of the trades in building Amazon’s data centers, the technology jobs that will be available for graduates from local colleges, and the millions of dollars in property taxes that will benefit schools and local governments.
“For too long, we have observed the erosion of talent across Pennsylvania, leaving communities behind,” Shapiro stated during the press conference. “No more. It is time for us to revitalize those communities and invest in their future. This investment in Pennsylvania marks the beginning of reversing that trend.
Shapiro’s administration announced plans to allocate $10 million for training programs and facilities at schools, community colleges, and union halls to address the skills demand for data centers.
Additionally, Amazon will be eligible for Pennsylvania’s current sales tax exemption on the acquisition of data center equipment, including servers and routers. This exemption is commonly provided by most states and is considered essential for a state to remain competitive.
These announcements contribute to the substantial influx of billions of dollars from Big Tech into the state’s data center sector.
Since the beginning of 2024, Amazon has pledged approximately $10 billion each towards data center initiatives in Mississippi, Indiana, Ohio, and North Carolina, as it enhances its infrastructure to compete with other technology leaders in response to the increasing demand for artificial intelligence products. The swift expansion of cloud computing and artificial intelligence has, in turn, intensified the need for energy-intensive data centers that require substantial power to operate servers, storage systems, networking devices, and cooling mechanisms.
Last year, Talen Energy, the majority owner of the Susquehanna nuclear power plant, sold its data center and the adjacent land to Amazon for $650 million. This transaction is intended to eventually supply 960 megawatts of electricity, likely at a premium rate. This amount represents 40 percent of the output from one of the largest nuclear power plants in the nation, sufficient to power over half a million homes. Amazon is in the process of dismantling that data center and constructing a larger facility on the site.
Nevertheless, the power supply agreement between Talen and Amazon, referred to as a “behind the meter” connection, has encountered delays due to the Federal Energy Regulatory Commission, marking the first instance of such a case being reviewed by the agency.
For Big Tech companies, directly connecting data centers to a power plant can significantly reduce development timelines and offers a quicker method of securing power compared to linking to the overloaded electricity grid.
It remains uncertain when FERC, which halted the agreement on procedural grounds, will reach a decision on the issue.
In Pennsylvania, Microsoft has already established a deal with the proprietor of the closed Three Mile Island nuclear power facility to reactivate a reactor under a 20-year contract to provide energy to its data centers across four states.
At the same time, the owners of what used to be Pennsylvania’s largest coal-fired power plant have announced plans to convert it into a $10 billion campus powered by natural gas for data centers.
