Market Data 
- Talen Energy is confident in its power deal with Amazon despite a regulatory challenge.
- CEO Mac McFarland sought to reassure wary investors on the company’s Q4 earnings call on Thursday.
- AI-driven electricity demand has boosted Talen’s stock in the last year.
Despite regulatory challenges, Talen Energy is forging ahead with its deal to provide power to an Amazon data center adjacent to its Susquehanna nuclear power plant in Pennsylvania, CEO Mac McFarland said Thursday on the company’s fourth-quarter earnings call.
“We have an existing relationship with a hyperscaler who shows no signs of pulling back on growth and has invested material capital and sweat equity into the Susquehanna agreement to date and on an ongoing basis,” McFarland said.
McFarland was referring to its current interconnection service agreement with Amazon Web Services for 300 megawatts of power. The AI boom has led to a surge in electricity demand coming from data centers, and Big Tech companies like Amazon are increasingly signing massive deals with independent power providers like Talen to meet it.
When AWS and Talen first announced their deal last year, the companies said they’d contracted for 960 megawatts of co-located capacity. In November, the Federal Energy Regulatory Commission rejected an interconnection service agreement that would have allowed the companies to expand their power purchase agreement beyond the initial 300 megawatts. Talen appealed the rejection in federal court in January.
“Talen has time to convert the contract to a different commercial arrangement and/or resolve the regulatory questions, and we are confident and focused on executing on one or both of those options over time,” said McFarland.
Talen reported a net income of $998 million attributable to stockholders for 2024. However, by Thursday’s market close, shares had fallen 7.3%.
Talen is one of many independent power producers that saw share prices of its stock surge in the last year, as Wall Street hyped up companies it saw as well-positioned to benefit from Big Tech’s massive AI data center buildout. Even after Thursday’s dip, Talen’s stock price has more than doubled since this time last year.
Shares of Vistra, another independent power producer that has seen its stock surge amid the AI boom, also fell today after it reported earnings.
While McFarland tried to reassure investors, not all of them were convinced.
“We’re clearly getting anxious,” Seaport Global analyst Angie Storozynski told Talen executives on the call.
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