Amazon has announced plans to invest $20 billion in two data center facilities in Pennsylvania. One of these data centers will be constructed next to the Susquehanna nuclear power plant in northeastern Pennsylvania, drawing power directly from it. This arrangement has caught the attention of federal regulators due to its unique energy-sourcing strategy. Meanwhile, the second data center will be established in Fairless Hills at the Keystone Trade Center, a site that used to be a U.S. Steel mill, and will receive its power through the conventional electricity grid.
At a press event held in Berwick near the Susquehanna plant, Governor Josh Shapiro described the investment as the biggest private sector initiative in the history of Pennsylvania. He noted that this move by Amazon represents “just the beginning” of broader plans, as his administration is collaborating with the tech giant on further projects within the state.
Although data centers are often critiqued for their limited long-term employment opportunities, they are praised for creating numerous construction jobs and contributing significantly to local economies through purchases and increased tax revenues. Governor Shapiro highlighted the benefits of the data centers, which include job opportunities for local construction workers and the influx of significant property tax revenues to support schools and local governments. Additionally, these projects are expected to provide tech jobs for graduates from regional colleges.
Pennsylvania is prepared to offer substantial incentives, potentially amounting to tens of millions of dollars. It will also spend $10 million on training programs at schools, community colleges, and union halls to develop necessary skills for these data center operations. Furthermore, Amazon will benefit from an existing state sales tax exemption on data center equipment purchases, a common advantage across states vying for such high-tech infrastructure investments.
This announcement amplifies the existing flow of data center investment from major tech companies into Pennsylvania. Already in 2024, Amazon has committed approximately $10 billion each for similar projects in Mississippi, Indiana, Ohio, and North Carolina, underscoring the competitive landscape as companies bolster their infrastructure to address soaring demand for artificial intelligence and cloud computing services.
The growing appetite for these services spurs a need for energy-intensive data centers, which are crucial for operating servers, storage, and other technological equipment. Notably, Talen Energy, majority owner of the Susquehanna plant, sold its adjacent data center and surrounding land to Amazon last year for $650 million, providing 960 megawatts of electricity—or enough energy to power over half a million homes.
Yet, the energy arrangement between Talen and Amazon—known as a “behind the meter” connection—is facing a procedural bottleneck with the Federal Energy Regulatory Commission. This method allows for a quicker power procurement process compared to tapping into the overburdened electricity grid, but it has sparked a debate on whether such deals might undermine power availability for other consumers and whether large energy users should bypass grid fee contributions.
The regulatory decision from FERC remains pending, and it is unclear when it will proceed. In a similar context, Microsoft has inked a deal to reactivate a reactor at the inactive Three Mile Island nuclear plant, securing energy supply for its data centers across several states. Additionally, plans are in motion to convert a former coal-powered plant in Pennsylvania into a $10 billion natural gas-fueled data center hub.