Morgan Stanley says weakness in Constellation, Vistra, PSEG a buying opportunity

Morgan Stanley notes that on Friday, the Federal Energy Regulatory Commission, or FERC, rejected the proposed Interconnection Service Agreement, or ISA, between the regional transmission organization PJM, Talen Energy (TLN), the owner of the Susquehanna nuclear power plant in Pennsylvania, and PPL, the wires-only utility whose service territory includes the Susquehanna location. The ISA would cover the terms and conditions of grid interconnection for Amazon Web Services’ (AMZN) proposed 960 megawatt data center complex to be located behind the meter at the Susquehanna nuclear power plant, the analyst noted. While the firm expects a negative market reaction, it views weakness in Constellation Energy (CEG), Vistra (VST) and PSEG (PEG) as “an excellent buying opportunity” as the firm sees a path to more nuclear data center deals, the analyst tells investors. The firm still believes multiple large data centers will be co-located at power plants in PJM and in ERCOT, the Texas power market, the analyst tells investors.