Power companies and utilities have struck a deal to incorporate 1.3 gigawatts of natural gas-powered energy, primarily for data centers.
Two PPL Corp. utilities, Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU), have reached a settlement agreement regarding the construction of new gas-fired power plants. This agreement, filed with the Kentucky Public Service Commission (PSC), supports the construction of about 1.3 gigawatts (GW) of new gas-fired generation.
The settlement includes the approval of two 645-MW natural gas combined-cycle units, expected to come online in 2030 and 2031. One of these units will be Mill Creek 6, and the other details are not specified. The agreement also includes a selective catalytic reduction system for the coal-fired Ghent Generating Station’s Unit 2.
The settlement delays the retirement date of the 297-MW Mill Creek Unit 2 coal plant until at least 2031, aligning its retirement with the commissioning of the new gas unit Mill Creek 6. This delay is primarily to meet rising demand from potential data centers (estimated at 1,875 MW) and other commercial and industrial growth (580 MW) projected through 2032 in Kentucky.
As part of the agreement, LG&E and KU have pledged to provide semi-annual updates to the PSC on construction progress, economic development, and load forecasts. This commitment addresses concerns raised by parties like the Sierra Club about the certainty of data center developments.
The utilities have also agreed to issue a request for proposals for renewable energy and energy storage by mid-2026. Additionally, they have promised to file annual reports on their participation in the Southeast Energy Exchange Market starting next year.
If approved, the utilities will withdraw their proposal for a four-hour, 400-MW battery electric storage system at LG&E’s Cane Run power plant. However, they reserve the right to pursue this in the future.
The parties to the agreement include LG&E and KU, Kentucky’s attorney general, Kentucky Industrial Utility Customers, the Southern Renewable Energy Association, and the Kentucky Coal Association.
The PSC has set a hearing on the agreement to begin on Aug. 4, 2025, and a decision is expected in the fourth quarter of 2025.
[1] The utilities have agreed to issue a request for proposals for renewable energy and energy storage by mid-2026. [2] The agreement includes a list of criteria for the PSC to assess the reasonableness of the utilities' spending. [3] As part of the settlement, LG&E and KU agreed to give semi-annual construction, economic development, and load forecast updates to the PSC. [4] The Sierra Club sought a measure for semi-annual construction, economic development, and load forecast updates from LG&E and KU in the agreement.
- The utilities have agreed to explore potential sources of renewable energy and energy storage in the near future by issuing a request for proposals by mid-2026.
- The agreement stipulates a set of criteria for the Kentucky Public Service Commission to evaluate the justification of the utilities' expenditures.
