Earlier this week, Gov. Andy Beshear welcomed a proposal by TeraWulf to build a gigawatt data center at an industrial park west of Ashland.
He cautioned, though, that any project of that scale would pay for 100% of its own electricity.
“When I look at data centers, I'm not going to let one come to Kentucky that would pass along the cost of energy to the people of that region,” Beshear said. “We are not going to do that.”
Where would it come from? Kentucky Power would provide the connection to the grid. What Kentucky Power lacks, though, is the ability to generate enough of its own power to meet the need of a data center.
Byron Gary is program attorney for the Kentucky Resources Council. He’s participated in cases at the Kentucky Public Service Commission involving Kentucky Power.
“Kentucky Power doesn't have an extra 500 megawatts for the first phase of this project,” he said, “and certainly not an extra gigawatt for the full planned announced project.”
Gary said Kentucky Power would rely on the 13-state regional transmission organization the company participates in, called PJM. Power in PJM could come from any of those states and any resources within them – fossil fuels, nuclear, renewables or batteries.
“So that seems to indicate that they're going to be interconnected to the wider PJM grid as directly as possible,” Gary said, “and it seems likely that they are intending to procure both capacity and energy from the regional transmission organization, rather than generating themselves.”
Kentucky Power owns half the generation at the Mitchell coal plant in West Virginia and a smaller gas unit at the Big Sandy Plant in Lawrence County.
Kentucky Power ceased coal generation at Big Sandy a decade ago. Gary said the plant has been offline so long it would be infeasible to bring it back.
An alternative, Gary said, would be to enter a purchased power agreement with Wheeling Power, which owns the other half of the Mitchell plant.
Mitchell is a two-unit coal plant that’s been operating since 1971. One of its two concrete cooling towers is deteriorating and will be replaced in a project that will cost both owners nearly $200 million.
In a case currently before the Kentucky PSC, Kentucky Power is asking for approval to charge customers for the cooling tower project. It would cost the average residential user about $5 a month.
In December, the commission approved Kentucky Power’s 50% ownership of the Mitchell plant to continue beyond 2028. That will cost customers an average of $2 a month.
Kentucky Power also received approval more recently from the PSC to raise customer rates.
