By Laila Kearney

NEW YORK (Reuters) – Talen Energy has asked U.S. regulators to dismiss a complaint over a recent Amazon (NASDAQ:) data center deal opposed by a group of utilities that say the deal could result in higher electricity bills, according to documents filed on Friday.

Talen said the challenge posed by utilities, including American electric Power (NASDAQ:) and Exelon (NASDAQ:) were untrue and that the agreement to combine with Amazon’s data center would not result in higher energy costs for the utility’s customers or grid reliability issues.

“This is an unlawful attempt to hijack this limited interconnection agreement amendment proceeding, in which they have no stake, and turn it into an ad hoc national referendum on the future of data center load,” Talen said in his filing with the Federal Energy Regulatory Commission (FERC).

As technology companies race for access to enormous amounts of electricity to power and cold data centers or the giant computer warehouses needed to implement technologies like generative AI, nuclear power, which is virtually carbon-free and provides 24/7 power, has emerged as the data center industry’s top choice.

FERC’s decision could set a precedent for deals like Talen’s, where data centers are co-located with the power plants that power them, allowing data centers to be up and running quickly without having to wait in call queues that can take years to resolve.

Talen announced in March that it had reached an agreement to sell electricity and a data center campus located at a Pennsylvania nuclear power plant to Amazon Web Services. The deal will provide Amazon’s computer warehouses with up to 960 megawatts of electrical capacity, enough to power about a million homes.

Several utilities, including American Electric Power and Exelon, last month asked FERC to hold a hearing to further investigate Talen’s deal to combine with Amazon or reject it outright. The group said the data center merger agreement could result in costs of $140 million a year being passed on to ordinary ratepayers.

Talen argues that if FERC allows a hearing or rejects his plan, it would have a chilling effect on data center expansion and discourage construction of modern power plants at a time of rising electricity demand in the U.S. not seen in decades.

AEP and Exelon say if the deal is approved, as it currently stands, it could burden ordinary ratepayers with energy infrastructure costs that do not benefit them, or lead to the grid being suddenly cut off from immense energy loads when power plants that are a direct source of power to data centers experience unexpected power outages.

It is unclear when FERC will make a decision on the matter.