Behind the Meter: Building Your Own Supply
On November 1, 2024, the Federal Energy Regulatory Commission, or FERC, rejected an amended agreement filed by PJM Interconnection, the grid operator for much of the eastern United States. The agreement would have let Talen Energy increase the amount of power its Susquehanna nuclear plant in Pennsylvania delivered directly to an adjacent Amazon Web Services data center campus, from 300 megawatts to 480 megawatts. The ruling turned a technical filing into a national argument about behind-the-meter power.
Behind the meter describes generation that serves a load directly, on the customer's side of the utility meter, without the power passing through the public grid. The appeal is plain. If a data center can sit next to a power plant and take its output directly, it may avoid waiting years for new transmission, and it may avoid some of the charges that ordinary grid customers pay for using the wires. The objection is the mirror image. Utilities and other customers argued that a co-located load still relies on the grid for backup and stability, and should pay its share of the grid's costs.
Talen and Amazon responded by changing the structure rather than the destination. On June 11, 2025, they announced a restated agreement under which Talen would supply up to 1,920 megawatts from Susquehanna to Amazon through 2042, with deliveries ramping up over several years. Crucially, the arrangement moved from behind the meter to front of the meter in April 2026, when transmission work at the plant was completed during its spring refueling outage. Under that structure the plant's output flows into the PJM grid, and the local utility, PPL Electric Utilities, delivers power to Amazon's facilities, with Talen acting as the retail supplier. The data center pays for grid service like other customers.
FERC then addressed the broader question. On December 18, 2025, it issued an order directing PJM to write clearer rules for large loads located at generating plants, including new forms of transmission service and revisions to its behind-the-meter generation rules. The details were left for PJM to develop, and a reader should check their current state before relying on any version of them. The direction was that co-location would be permitted under defined terms, rather than handled case by case.
A different form of on-site power appeared in Memphis, Tennessee. xAI, the artificial intelligence company founded by Elon Musk, brought its Colossus supercomputer online there in 2024 and powered it in part with natural gas turbines installed on site while grid capacity was expanded. The turbines drew opposition from local residents and environmental groups over air pollution. On July 2, 2025, the Shelby County Health Department granted xAI an air permit for fifteen turbines, a decision that was then appealed by the National Association for the Advancement of Colored People, or NAACP, and others. The episode showed both the speed that on-site generation can offer and the local scrutiny it attracts.
These cases share an economic logic that cuts across every power choice. There are four costs to weigh. The first is energy, the price per kilowatt-hour, driven mostly by fuel for gas plants and by capital recovery for nuclear, wind and solar. The second is capacity, the cost of having enough generation available at the moment of peak demand. The third is delivery, the cost of the wires. The fourth, often ignored, is time: the value of electricity that arrives two years earlier. On-site gas can win on time and lose on fuel price risk and emissions. A grid connection can win on reliability and lose on time. A nuclear contract can win on stability and carbon and lose on schedule risk.
On-site generation also changes what redundancy means. A data center running on its own turbines needs spare turbines, fuel supply arrangements and a plan for maintenance outages, because there may be no grid to fall back on. Where a grid connection exists as backup, someone must pay to keep that capacity ready.
Faraday's read is that behind-the-meter power is less a technology than a negotiating position about who pays for the grid. The Susquehanna restructuring suggests that for large, long-lived campuses the grid tends to win that negotiation eventually, while on-site generation serves as a bridge, a backup or a lever. The final module moves from the campus to the rack, where a different change is under way.