HARRISBURG, Pa. (AP) — Amazon said Monday that it will spend $20 billion on two data center complexes in Pennsylvania, including one it is building alongside a nuclear power plant that has drawn federal scrutiny over an arrangement to essentially plug right into the power plant.
Kevin Miller, vice president of global data centers at Amazon’s cloud computing subsidiary, Amazon Web Services, told The Associated Press that the company will build another data center complex just north of Philadelphia.
One data center is being built next to northeastern Pennsylvania's Susquehanna nuclear power plant. The other will be in Fairless Hills at a logistics campus, the Keystone Trade Center, on what was once a U.S. Steel mill.
At a news conference in Berwick in the shadow of the power plant, Gov. Josh Shapiro called it the largest private sector investment in Pennsylvania's history. He said Monday’s announcement is “just the beginning” because his administration is working with Amazon on additional data center projects in the state.
While critics say data centers employ relatively few people and pack little long-term job-creation punch, their advocates say they require a huge number of construction jobs to build, spend enormous sums at area vendors and generate strong tax revenues for local governments.
Shapiro touted the work that will keep construction trades members busy building Amazon's data centers, the tech jobs that will be waiting for graduates of area colleges and the millions of dollars in property taxes that will flow to schools and local governments.
“For too long, we’ve watched as talents across Pennsylvania got hollowed out and left behind,” Shapiro said at the news conference. “No more. Now is our time to rebuild those communities and invest in them. This investment in Pennsylvania starts reversing that trend.”
Neither Shapiro's administration nor Amazon provided details about the taxpayer-paid financial incentives that Amazon is getting to build in Pennsylvania, typically a key element of data center deals as states compete for large installations they hope will be an economic bonanza.
Amazon, however, will likely qualify for Pennsylvania's existing sales tax exemption on purchases of data center equipment, such as servers and routers, an exemption that most states offer and that is viewed as a must-have for a state to compete.
The announcements add to the billions of dollars in Big Tech's data center cash already flowing into the state.
Since 2024 started, Amazon has committed to about $10 billion apiece to data center projects in Mississippi, Indiana, Ohio and North Carolina as it ramps up its investment in infrastructure to compete with other tech giants to meet growing demand for artificial intelligence products.
The rapid growth of cloud computing and artificial intelligence has fueled demand for data centers that need power to run servers, storage systems, networking equipment and cooling systems.
The majority owner of the Susquehanna nuclear power plant, Talen Energy, announced last year that it had sold its data center to Amazon for $650 million in a deal to eventually provide 960 megawatts. That's 40% of the output of one of the nation's largest nuclear power plants, or enough to power more than a half-million homes.
However, the arrangement between Talen and Amazon — called a “behind the meter” connection — has been held up by the Federal Energy Regulatory Commission in the first such case to come before the agency.
It has raised questions over whether diverting power to higher-paying customers will leave enough for others and whether it’s fair to excuse big power users from paying for the grid.
For Big Tech, plugging energy-hungry data centers directly into a power plant can take years off their development timelines and is a much faster route to procuring power than having to connect to the congested electricity grid.
It’s not clear when FERC, which blocked the deal on a procedural grounds, will decide the matter, leaving in limbo regulatory treatment of the deal and others that likely would follow.
Already in Pennsylvania, Microsoft announced a deal with the owner of the shuttered Three Mile Island nuclear power plant to restart the reactor under a 20-year agreement to supply its data centers in four states with energy.
Meanwhile, the owners of what was once Pennsylvania’s biggest coal-fired power plant say they will turn it into a $10 billion natural gas-powered data center campus.
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Follow Marc Levy on X at: https://x.com/timelywriter.
Marc Levy, The Associated Press
