Kentucky Utilities (KU), and Louisville Gas and Electric (LG&E), plan to build two 645 MW gas-fired units, a 400 MW/1,600 MWh battery storage project, and a selective catalytic reduction (SCR) project, as announced by PPL subsidiaries on February 28, 2025 filings with the Kentucky Public Service Commission (PSC).
Permission has been requested from the state utility regulators to build these projects for a coal-fired unit at a combined cost of $3.7 billion. The new capacity is needed to serve potential data center customers and the BlueOval SK Battery Park being built by Ford and SK On, a South Korean battery manufacturer. The utilities have about 6 GW in potential data center customers and another 2 GW in other possible customers, according to the filing.
Without the proposed resources, KU and LG&E would have to buy large amounts of power from the wholesale market — which would be contrary to the recent PSC directives — or institute blackouts or deny service to new customers, which would violate their obligations to serve new and existing loads.
The data center pipeline for PPL utilities in Kentucky and Pennsylvania continues to grow, according to the parent company. The utilities have about 48 GW in active data center requests in Pennsylvania and nearly 6 GW in Kentucky. In the latter state, attracting data centers is of paramount importance, according to legislation passed last year by state lawmakers. Largely driven by data center development, KU and LG&E expect their annual electricity sales will jump 47 per cent to about 48,130 GWh in 2032 from 32,800 GWh this year, according to their filing with the PSC. They also expect their summer and winter peaks to increase nearly 30 per cent to about 8,030 MW and 7,930 MW, respectively.
Electricity use in the utilities service areas also jumped during recent winter storms, such as Winter Storm Enzo in January 2025, indicating more generating resources are needed, for which several US utilities are turning to gas-fired generation. The utilities expected the gas-fired projects will cost about $2.8 billion, the lithium-ion Cane Run battery facility at LG&E’s Cane Run Generation Station in Jefferson County, Kentucky, will cost $775 million, and the SCR project will cost $152 million. It will take five years to build the gas-fired units and three years to build the energy storage facility.
KU and LG&E expect to finance the proposed facilities with a combination of cash flow and new debt and equity. They said they plan to seek cost recovery for the gas-fired units and energy storage projects in future general rate cases.
In part, KU and LG&E said they want to self-build their proposed battery storage project because of the failure to develop six solar projects they contracted for through power purchase agreements. Three of the projects were cancelled and the remaining face pricing challenges.
The PPL subsidiaries anticipate the PSC will rule on the proposal by November 2025.