Google Commits $4.3 Billion to Power Purchase, Securing 3,590 Megawatts of Long-Term Energy from Constellation Energy

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Google (GOOGL.US) has signed a deal with Constellation Energy (CEG.US), the largest grid operator in the United States, to purchase 3,590 megawatts of power, with newly built nuclear generation accounting for roughly one-quarter of that supply.

The two companies stated that the agreement will bring Constellation more than $4.3 billion in new investment and involves capacity upgrades at multiple nuclear reactors owned by the power company in the Midwest and Mid-Atlantic regions.

Major technology companies are racing to lock in massive electricity supplies across the United States to power data centers, striking unprecedented agreements with American utility companies.

Over the past two years, Constellation announced a deal to restart the Three Mile Island nuclear reactor in Pennsylvania to serve Microsoft's data centers, while Google signed an agreement to restart a NextEra Energy nuclear plant in Iowa.

Under the latest package, Google signed a 20-year power purchase agreement to procure 890 megawatts from multiple Constellation-owned nuclear plants, which will be upgraded to generate more electricity from existing reactors. The two companies said electricity from the first upgraded plant is expected to be delivered in 2028.

Google also signed a long-term supply agreement to purchase an additional 2,700 megawatts from Constellation in the PJM region. Google said this portion of electricity is not tied to a specific generation source and is intended to provide long-term revenue certainty for Constellation's operating plants.

Maryland-based Constellation is the largest nuclear plant operator in the United States and also owns a large fleet of gas-fired power plants.

Amanda Peterson Corio, Google's global head of energy and electricity, said in a statement, "We are committed to meeting our own growth responsibly, actively investing in clean, reliable power, and bringing new capacity to our nation's grid."

As part of the agreement with Google, the 11 nuclear units expected to undergo upgrades are located in Illinois, Pennsylvania, and New Jersey, all within the territory of PJM Interconnection, the largest grid in the United States.

PJM management has proposed requiring data center customers connected to the grid across 13 states to either bring their own power or face the risk of being remotely disconnected from the grid during peak demand periods.

The two companies said the agreement between Google and Constellation is a direct response to PJM's "bring your own power" proposal.

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