The Kentucky Attorney General’s office says a proposed data center in the eastern part of the state could help offset the cost of a power plant project.
Kentucky Power is asking the state’s Public Service Commission to approve the construction of a new cooling tower at its Mitchell coal plant in West Virginia.
It would replace a 55-year-old concrete structure that is rapidly deteriorating.
In a filing to the commission Friday, Attorney General Russell Coleman’s office says TeraWulf’s proposed data center near Ashland could help offset the cost of the tower.
The 1-gigawatt data campus would become one of Kentucky Power’s largest customers. In a recent investor presentation, TeraWulf’s CEO said the size of the project could double.
At a hearing last month in Frankfort, PSC chairman Angie Hatton described the cooling tower as “unpopular” because Kentucky Power customers would pay for part of the $191 million cost.
The utility’s customers pay some of the highest bills in the region, and the PSC has launched an independent audit of Kentucky Power’s management and operations.
Also Friday, the PSC approved TeraWulf’s electricity contract for its Hancock County data center project in Western Kentucky.
The company will use an existing 482-megawatt connection at an idle aluminum smelter. Under a contract with regional and local utilities, the data center would be required to curtail its electricity use during a grid emergency.
The Justified Data Campus near Hawesville would serve the needs of artificial intelligence company Anthropic. Last month, TeraWulf signed a 20-year contract with the AI firm.
TeraWulf filed an energy plan with the PSC pledging to abide by the requirements laid out by Gov. Andy Beshear’s executive order earlier this month.
The electricity costs of the Hancock County facility will not be passed on to residential customers, the company says. Instead, it will use less water than the aluminum plant and emit fewer air pollutants, according to the filing. It also pledged to pay its share of state and local taxes and engage with the community.
TeraWulf’s Eastern Kentucky facility is not as far along as its Hancock County project. In initial public meetings, residents have already raised many of the same objections.
Communities in Kentucky Power territory have already seen two aluminum plant proposals fall through in recent years, including one that was supposed to be built on the site of the TeraWulf project.
There is also lingering resentment over Kentucky Power’s decision more than a decade ago to end coal generation at the Big Sandy plant in Lawrence County.
Mitchell, near Moundsville, West Virginia, had pollution controls that would have cost $1 billion to install at Big Sandy. Kentucky Power acquired a 50% stake in Mitchell with another American Electric Power subsidiary, Wheeling Power.
With a $51 million grant from the U.S. Department of Energy, the Mitchell cooling tower project would cost Kentucky Power customers, on average, $3.64 a month.
The power company considered repairs to the existing tower or a partial demolition, but those options are costly and complicated, officials have testified.
A Sierra Club witness testified Mitchell should be retired and replaced with a combination of natural gas, renewables and battery storage. That would be a less risky option in the long run for Kentucky Power customers than continuing to invest in an aging coal facility, the individual testified.
Mitchell is currently projected to retire in 2040.
