NEW YORK, May 8 (Reuters) - Talen Energy ( TLN ) is

considering alternative arrangements to supply electricity to

data centers after regulators pushed back on a plan to fuel an

Amazon ( AMZN ) data center directly from Talen's Pennsylvania nuclear

power plant, executives with the U.S. power company said on

Thursday.

Independent U.S. power producers like Talen have seen a

surge in interest over the last year - propelling shares of the

companies to record highs - largely on the prospect of striking

deals to supply electricity to Big Tech's data centers directly.

The so-called co-located arrangements, in which data

centers are located at or near the power plants that fuel them,

would potentially eliminate year-long wait times associated with

connecting to the broader electrical grid.

Rulings against the arrangements by the Federal Energy

Regulatory Commission, however, are leading some of those

companies to make alternate plans.

"I think there are multiple ways to supply power to data

centers," Talen CEO Mac McFarland said on a company earnings

call with investors.

Talen said it is considering other types of data center

deals - including ones that connect the centers to the grid as

part of traditional commercial power contracts.

Giant independent power producer,

Constellation Energy ( CEG ), earlier this week

said it was also refocusing on more conventional data

center power arrangements after considering co-located data

center deals at several of its nuclear plant sites.

Talen's data center deal with Amazon ( AMZN ), which was

announced in early 2024, was a first-of-its kind co-located

power arrangement. As part of the power pact, Talen would ramp

up electricity supplied from its Susquehanna nuclear plant to

the data center to as much as 960 megawatts over the course of

several years.

In response to the deal, which diverts electricity from

the grid for the use of a single customer, FERC ruled last year

to cap the amount of power to Amazon's ( AMZN ) data center at 300

megawatts, citing concerns about power reliability and costs for

the broader public by redirecting nearly a gigawatt of

electricity for a single customer.

Talen executives said they were still supplying

electricity to the Amazon ( AMZN ) data center, with plans to reach 120

megawatts by the end of this year. Talen is currently appealing

FERC's decision and expects a court schedule on the case in the

coming weeks.