The mechanism. On December 18, 2025, FERC issued a unanimous order finding PJM's tariff "unjust and unreasonable" on two fronts that matter enormously to merchant nuclear: how co-located load gets priced, and how behind-the-meter generation (BTMG) is treated in resource adequacy. FERC didn't ban co-location — Commissioner Rosner's concurrence explicitly frames it as clearing a path for deals that "lower grid costs." But the order also directs that a generator can't pull capacity off the grid to serve a data center until all transmission upgrades needed to preserve reliability for everyone else are built — with 100% of that cost allocated to the generator, not spread to ratepayers. That single allocation rule is the whole ballgame. The Amazon-Talen Susquehanna arrangement drew a formal challenge from Exelon and AEP alleging roughly $140 million a year in transmission cost-shifting onto other PJM customers. FERC's compliance directive to PJM (filings due through February 2026) is designed to close exactly that gap. If nuclear operators must now fund their own interconnection upgrades to keep serving legacy grid customers while also carving out behind-the-meter capacity, the arbitrage that made these deals so lucrative — sell clean, firm power to a hyperscaler at a premium, dodge market/capacity pricing — gets a lot less clean.
The Interconnect Loser: Why FERC's Co-Location Ruling Could Squeeze Merchant Nuclear Margins
FERC just told PJM to write the rulebook for behind-the-meter data center deals — and the same order that legitimizes co-location also loads generators with 100% of the transmission-upgrade costs, threatening the premium pricing nuclear operators were counting on.
| Ticker | Company | 1-year change |
|---|---|---|
| GEV | GE Vernova | +87.6% |
| VST | Vistra | −22.2% |
| CEG | Constellation Energy | −35.8% |
| OKLO | Oklo | −64.4% |
| SMR | NuScale Power | −74.1% |
FERC didn't kill co-location — it just sent nuclear operators the bill for keeping everyone else's lights on while they sell the good electrons to a hyperscaler.
Who cashes in. GE Vernova GEV wins regardless of how the cost allocation shakes out: someone has to build the grid-scale transformers, switchgear, and transmission upgrades that FERC is now mandating generators pay for directly, and GEV's backlog only grows as compliance deadlines force utilities to act. Vistra VST is comparatively insulated versus pure-nuclear peers — its fleet is diversified across gas, nuclear, and renewables/storage, so a nuclear-specific BTMG squeeze dents a smaller share of earnings. BWXT benefits on the supply side almost independent of the ruling — it makes reactor components and naval/medical isotopes, not merchant power, so it's a picks-and-shovels beneficiary of the broader nuclear buildout without co-location price risk.
Who is exposed. Talen Energy TLN is the most direct read-through: its entire growth thesis has been the Susquehanna-Amazon restructured deal (a 17-year, up to 1,920 MW arrangement), and it's the named party in the transmission-cost-shift dispute. Constellation CEG carries less single-asset exposure than Talen but has leaned hard into behind-the-meter and co-location narratives (including its own hyperscaler talks) to justify a premium multiple; tighter BTMG accounting compresses that story. Oklo OKLO and NuScale SMR, both pre-revenue SMR developers pitching dedicated data-center power as their core use case, take a sentiment hit if regulators signal skepticism toward exclusive plant-to-load arrangements before either company has a reactor operating.
The play. This isn't a thesis-killer — FERC explicitly wants co-location to work. It's a margin-mechanics story: watch PJM's compliance filings (due through mid-February 2026) for the actual cost-allocation formula, and watch whether Talen and Constellation disclose capex commitments for "their own" transmission upgrades. A generator eating upgrade costs it previously would have socialized is a direct hit to the premium-per-megawatt economics Wall Street priced into these stocks in 2025.
Source: original report ↗
Free: catalyst alerts, straight to your inbox.
Get the White House orders, federal contracts, and FDA decisions that move money — with who cashes in — free. Unsubscribe in one click.
Free · weekly · unsubscribe anytime. Privacy.
Stay three moves ahead of every practice in your market.
Knowing it happened is table stakes. Money Racket Pro hands you the play — what each move means for your margins, your license, and your patients, and exactly what to do about it — in a two-minute brief, twice a week. The owners who read it never get blindsided.
Get the edge · $40/moJoin the owners who run ahead of the industry. Cancel anytime, one click.