NEW YORK (Reuters) - U.S. energy regulators rejected an amended interconnection agreement for an Amazon data center connected directly to a nuclear power plant in Pennsylvania, a filing showed on Friday.

Members of the Federal Energy Regulatory Commission said the agreement to increase the capacity of the data center located on the site of Talen Energy's Susquehanna nuclear generating facility could raise power bills for the public and affect the grid's reliability.

As Big Tech races to grow its data centers needed to expand technologies like generative artificial intelligence, locating centers directly on power plant sites has become an attractive option to power up quickly.

"Co-location arrangements of the type presented here present an array of complicated, nuanced and multifaceted issues, which collectively could have huge ramifications for both grid reliability and consumer costs," FERC Commissioner Mark Christie said in the order.

The Talen agreement, however, would divert large amounts of power currently supplying the regional grid, which FERC said raised concerns about how that loss of supply would affect power bills and reliability. It was also unclear how transmission and distribution upgrades would be paid for.

FERC Chairman Willie Phillips dissented from the vote, indicating that it could slow U.S. dominance in the global contest over artificial intelligence.

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"It is a step backward for both electric reliability and national security," Phillips said.