Constellation pact with Microsoft not impacted by Talen order, says Evercore ISI

Evercore ISI analyst Durgesh Chopra notes that in “a surprising move late Friday,” the Federal Energy Regulatory Commission, or FERC, voted two to one to deny the proposed amendment that sought to modify an ISA among PJM, the grid operator, the power plant owner, Talen (TLN), and interconnected transmission owner PPL that sought to increase the data center’s co-located load from 300 MW to 480 MW, citing concerns around grid reliability and consumer costs. The firm, however, believes there are alternate paths forward – including to re-file with additional support, a settlement with PJM transmission owners, or other alternatives – and expects Talen to outline next steps in coming days. After having caught up with Constellation Energy (CEG) management, the firm noted that Constellation’s agreement with Microsoft (MSFT) is front of the meter and not impacted by this order, the analyst noted.