Tech giants are racing to secure nuclear power for their AI data centres. Google’s partnering with Kairos Power for SMRs. Microsoft signed a 20-year deal to restart Three Mile Island. Amazon attempted to co-locate 960 MW at Pennsylvania’s Susquehanna plant.
This guide is part of our comprehensive overview of Big Tech Goes Nuclear to Power Artificial Intelligence and What It Means for the Future of Data Centres, where we explore how AI energy demands are reshaping data centre infrastructure.
Here’s what no one tells you: the regulatory maze is where projects live or die. You’re juggling the NRC for reactor licensing, FERC for grid connections, the DOE for site selection, the EPA for environmental permits, and state-level agencies on top of all that.
The ADVANCE Act promised to streamline nuclear licensing—timelines dropped from 24 months to a target of 17 months. But FERC’s rejection of Amazon’s Susquehanna co-location deal in November 2024 threw the entire behind-the-meter strategy into question.
This guide maps the complete regulatory pathway—which agencies approve what, how the ADVANCE Act changes timelines, and what the Amazon-Talen case means for your deployment strategy.
Understanding this landscape is the difference between planning a realistic timeline and discovering halfway through that you’re missing permits that add another two years to deployment.
What Role Does the NRC Play in Approving New Reactor Designs for Data Centres?
The Nuclear Regulatory Commission licenses every nuclear reactor in the United States. If you’re planning to power your data centre with an SMR, you’re going through the NRC. There’s no way around it.
The NRC’s approval process has three stages: design certification, construction permits, and operating licences.
The ADVANCE Act, enacted in July 2024, changed the economics and timelines. The NRC established reduced hourly rates—$274 versus $325—and set a 17-month target for SMR licensing, down from 24+ months.
But most SMR applications still take 18-24 months. You still need safety analyses, environmental assessments under NEPA, and public comment periods. The target is one thing, reality is another.
Some designs are already certified. NuScale received NRC design certification for its 77 MW SMR. GE-Hitachi’s BWRX-300 and Kairos Power’s fluoride salt-cooled designs are working through the review process.
Using a pre-certified design saves you 24-36 months. That’s the difference between first power in five years versus eight years. Don’t underestimate that advantage.
The NRC approves the reactor itself. They don’t approve your grid connection or your behind-the-meter power arrangement. That’s FERC’s territory. Understanding these advanced reactor designs is crucial for navigating the approval process.
Why Did FERC Block the Amazon-Talen Co-location Arrangement?
In November 2024, FERC rejected a proposal to allow Amazon Web Services to increase the power load from the Susquehanna nuclear plant from 300 MW to 960 MW. Amazon wanted to take the power directly, behind-the-meter.
FERC said no. Three concerns drove the decision.
First, cost shifting. When 960 MW gets withdrawn from the grid to serve a private data centre, someone has to make up that capacity. Billions in excess capacity costs were already being attributed to data centres in PJM territory. FERC wasn’t going to let those costs land on residential ratepayers.
Second, grid reliability. Taking that much generation out was “the equivalent to basically taking that generation source out of the grid”. When large generators serve private loads, reliability suffers.
Third, rate structures. There was no clear framework for charging facilities that use grid infrastructure for backup without paying transmission fees.
FERC ordered PJM to develop clearer co-location guidelines by December 2025. Talen Energy requested a rehearing, but FERC reaffirmed its decision in April 2025, ending the Amazon-Talen arrangement.
The case set a precedent. Behind-the-meter nuclear arrangements aren’t dead, but they need to demonstrate adequate cost allocation and reliability assurances. No more handwaving.
What Is Behind-the-Meter Configuration and How Does It Differ from Grid Connection?
Behind-the-meter power means your data centre connects directly to an adjacent power plant without using the public electrical grid’s transmission infrastructure.
Traditional front-of-meter connection requires you to take power through utility transmission lines, pay standard regulated rates, and contribute to grid capacity costs.
The appeal of behind-the-meter is straightforward. You bypass grid interconnection queues—nationally, the backlog can delay projects 5+ years. You negotiate custom rates directly with the power producer. You secure dedicated 24/7 baseload power that’s immune to grid congestion.
But behind-the-meter doesn’t mean you’re totally disconnected from the grid. Most facilities maintain grid connections as backup. And that’s where FERC’s scrutiny kicks in.
When you’re connected for backup, you’re using grid infrastructure without paying for it the way everyone else does. FERC is now asking: how much should you pay for that backup capacity?
Advisory firm Capstone projects that FERC will approve behind-the-meter arrangements, but with requirements. You’ll need to pay for “services taken” from the grid. You’ll need to contribute to capacity adequacy costs. You’ll need to prove withdrawing generation doesn’t harm reliability.
The regulatory path for behind-the-meter exists, but it’s no longer the simple workaround it seemed like in 2024.
How Does the ADVANCE Act Change Nuclear Licensing Timelines?
The ADVANCE Act became law in July 2024, streamlining NRC licensing for advanced reactors.
The Act reduced NRC’s hourly review rates—$274 versus $325 for traditional reactors—and set a 17-month target timeline compared to 24+ months previously. It authorised $75 million in prize competitions and directed the NRC to develop risk-informed regulations tailored to SMRs rather than 1970s-era rules.
But most applications still average 18-24 months. Environmental reviews under NEPA haven’t changed. The NRC can move faster on safety reviews, but environmental assessments and public comment periods still take time.
Plan on 18-24 months for NRC approval if you’re using a certified design, and add another 24-36 months if your reactor design isn’t certified yet. For a complete breakdown of realistic timelines and how project delays impact your deployment strategy, see our detailed cost and timeline analysis.
What Federal Agencies Besides the NRC Must Approve Nuclear Data Centre Projects?
The NRC handles reactor licensing. But that’s just the start.
FERC regulates any grid connection. Even if you’re taking power directly from an adjacent plant, if you maintain any grid connection for backup, FERC has jurisdiction.
The Department of Energy offers expedited permitting for projects on federal sites like Idaho National Laboratory, Oak Ridge, and Savannah River. DOE picked four sites in July 2025 for AI data centres. By leveraging DOE land, you access streamlined permitting while bypassing some state regulations.
The EPA issues air quality permits and oversees NEPA compliance. For projects involving water sources, the Army Corps of Engineers may require permits. State agencies handle retail power rates, environmental permits, and land use.
There’s no single agency managing the full approval process. You’re coordinating across federal and state jurisdictions. Which means you need someone on your team who can keep all those balls in the air.
How Long Does the Complete Approval Process Take for SMR-Powered Data Centres?
The complete regulatory timeline ranges from 30 to 60 months depending on reactor design certification status, site characteristics, and regulatory pathway.
Best-case: You’re using an NRC-certified reactor like NuScale’s 77 MW SMR. NRC licensing takes 18-24 months. Environmental permits, state approvals, and FERC agreements add 12-18 months. Then construction runs 24-36 months. Total: 54-78 months to first power.
Worst-case: Your reactor design isn’t certified yet. Add another 24-36 months for NRC design review before construction starts. Total: 78-114 months.
Compare that to grid-connected data centres using existing power: 18-36 months to deploy.
Projects on DOE federal sites can shave 12-18 months off the timeline. Start regulatory approvals early and run processes in parallel. Don’t wait for NRC approval before engaging with FERC or state agencies. Batch your permits where you can.
What Are the Pros and Cons of Behind-the-Meter vs Grid-Connected Nuclear Power?
Behind-the-meter offers three advantages: bypass grid interconnection queues (3-5 years), negotiate custom rates, and secure dedicated 24/7 baseload power. You can come online without waiting on grid hookups.
But FERC’s rejection of the Amazon-Susquehanna deal introduced regulatory uncertainty. The rules about cost allocation aren’t clear yet.
Grid-connected approaches require traditional interconnection but benefit from established regulatory frameworks, no FERC co-location challenges, and the ability to sell excess power.
Microsoft’s deal with Constellation demonstrates a hybrid model: grid-connected but with a 20-year dedicated contract ensuring stable pricing. This combines regulatory certainty with power security.
The choice depends on regulatory risk tolerance and timeline urgency. The biggest challenge with behind-the-meter is the upfront capital required. You need deep pockets.
What State-Level Regulations Affect Nuclear Data Centre Deployment?
State regulations create variability in deployment timelines, even after securing federal NRC approval.
Pennsylvania’s Senate Bill 991 is a good example of proactive approaches—dedicated permitting frameworks for nuclear-powered data centres.
State public utility commissions control whether co-located facilities pay grid capacity costs and how behind-the-meter arrangements affect ratepayer bills. Environmental permitting covers air quality, water permits, wildlife assessments, and cultural site reviews—typically adding 12-18 months.
Some states maintain nuclear moratoriums despite federal approval. Others like Idaho actively court projects through expedited reviews and tax incentives.
Projects on DOE federal sites bypass some state regulations. But don’t assume federal approval automatically translates to state cooperation. You still need to work the politics.
What Does FERC’s December 2025 Co-location Ruling Mean for Data Centres?
FERC issued an order to PJM Interconnection on December 18, 2025 establishing the first comprehensive federal framework for behind-the-meter connections.
Industry analysts expect FERC to approve behind-the-meter arrangements but with requirements. Co-located facilities must pay for “services taken” from the grid, contribute to capacity costs proportional to backup reliance, and prove withdrawing generation doesn’t harm reliability.
The ruling adopts a “criteria-based framework”—each proposal gets evaluated based on metering configuration, grid dependencies, and load characteristics.
For nuclear data centre projects, behind-the-meter arrangements remain viable but face case-by-case scrutiny and cost-sharing requirements. The PJM ruling will likely influence grid operators nationally.
Model both behind-the-meter and grid-connected scenarios in your project budgets. Don’t assume behind-the-meter saves you from all grid costs. That ship has sailed.
For a comprehensive overview of how these regulatory frameworks affect nuclear-powered AI infrastructure deployment, see our complete guide to Big Tech’s nuclear power pivot.
FAQ Section
How much does NRC licensing cost for an SMR data centre project?
NRC licensing costs for SMRs under the ADVANCE Act average $15-25 million depending on design certification status and site complexity. Projects using pre-certified designs pay reduced hourly rates—$274 per hour versus $325 for traditional reactors. Typical applications require 40,000-60,000 NRC review hours. Add $5-10 million for environmental consultants, legal fees, and engineering studies. It’s not cheap.
Can data centres use microreactors instead of SMRs to simplify regulatory approval?
Microreactors (typically under 20 MWe) face the same NRC licensing requirements as larger SMRs. The problem is that microreactors’ smaller capacity means you need multiple units to reach 100+ MW. That multiplies licensing costs and complexity without reducing individual approval timelines. You’re not getting out of it easier.
Does the ADVANCE Act apply to restarting mothballed nuclear plants for data centres?
Yes. The ADVANCE Act’s provisions for expedited permitting and reduced fees can apply to reactor restarts, as Constellation’s Three Mile Island Unit 1 restart for Microsoft demonstrates. Restart applications typically require 12-18 months for NRC review. That’s faster than new construction while still providing carbon-free baseload power. Smart play if you can find a viable mothballed plant.
Which states currently allow nuclear-powered data centres?
Federal NRC licensing preempts state bans on nuclear facilities, but states control land use and environmental permits. Pennsylvania, Idaho, Texas, Tennessee, and Virginia actively support nuclear data centres through expedited permitting and incentives. California, New York, and Oregon maintain restrictive policies despite federal approval authority. Know your state politics before you commit.
How do environmental permits differ for nuclear vs natural gas data centre power?
Nuclear facilities require NRC environmental reviews under NEPA, state air and water permits, and radiological monitoring plans—typically adding 12-18 months. Natural gas plants need EPA air quality permits, state environmental reviews, and potential wetland permits but generally complete in 8-12 months. Both face similar land use and zoning requirements. Nuclear takes longer but avoids carbon emissions issues down the line.
What happens if FERC approves my co-location arrangement but the state utility commission objects?
FERC has jurisdiction over wholesale power markets and interstate transmission, which typically preempts state objections to co-location arrangements themselves. But state utility commissions can still block retail service aspects, impose local permitting delays, or challenge cost allocations affecting in-state ratepayers. That creates practical obstacles despite federal approval. You need both layers on board.
Can Canadian or international SMR designs qualify for ADVANCE Act benefits?
Foreign-designed SMRs can qualify for ADVANCE Act streamlined licensing if vendors partner with US-based entities and submit designs for NRC certification. Several Canadian SMR vendors like Ontario Power Generation and Moltex are pursuing US certification. Domestic designs from NuScale and GE-Hitachi currently have first-mover advantages in the approval pipeline. But foreign designs can get there.
How does the DOE’s site selection process work for federal land data centres?
DOE issued solicitations in July 2025 for AI data centre projects on federal sites including Idaho National Laboratory, Oak Ridge, and Savannah River. Applications require demonstrating technical capability, financial backing, and proposed reactor technology. DOE selection provides streamlined environmental reviews and existing grid infrastructure but doesn’t replace NRC licensing requirements. It’s a leg up, not a free pass.
What role do regional grid operators besides PJM play in nuclear data centre approvals?
Regional transmission organisations like MISO, SPP, ERCOT, and CAISO each have interconnection procedures affecting nuclear data centres in their territories. While PJM’s co-location proceeding sets precedent, other RTOs may adopt different frameworks. ERCOT operates independently from FERC oversight in Texas, potentially offering simpler behind-the-meter approval paths. Your mileage varies by region.
Are there size limits on SMRs that can power data centres without additional scrutiny?
The NRC defines SMRs as reactors under 300 MWe, but FERC co-location scrutiny is triggered by load size and grid impact, not reactor capacity. The Amazon-Susquehanna case involved 960 MW of load. Even 100-200 MW behind-the-meter arrangements may face FERC review depending on regional grid conditions and capacity market impacts. Size matters for FERC review.
How do nuclear data centre projects affect local property taxes and community benefits?
Nuclear facilities typically generate significant property tax revenue—$5-15 million annually for SMR installations—and require local agreements for emergency planning, road use, and public safety coordination. Community benefit agreements often include payments-in-lieu-of-taxes, infrastructure investments, and job creation commitments. State laws vary on what communities can negotiate. Don’t overlook local politics.
What insurance requirements apply to nuclear-powered data centres?
The Price-Anderson Act requires nuclear operators to carry primary liability insurance ($450 million) plus participate in a secondary industry pool ($13 billion total). Data centres co-located with nuclear plants must coordinate on emergency planning, evacuation procedures, and business interruption insurance. This adds $2-5 million annually to operating costs compared to conventional power. Factor it in early.
