Kentucky Power and TeraWulf have amended their power contract for the Muskie Data Campus, doubling contracted demand from 500 megawatts (MW) to 1 gigawatt (GW). The amendment would send an expected $100 million in winter bill credits to the utility's residential customers. The deal still needs approval from the Kentucky Public Service Commission.
TeraWulf, a data center developer, told investors that the first 500-MW phase remains on track to begin ramping in 2028. The second phase moves up from 2030 to 2029, subject to commission approval and Kentucky Power's construction schedule. The company described the site as an AI and high-performance computing campus, and its chief executive said power availability sits at the center of talks with prospective tenants.
Credits Start in 2029 and Run a Decade
Under the amended contract, TeraWulf would fund the credits over its first 10 years, beginning in 2029, Kentucky Power said. The utility estimates a typical residential customer could see about $25 a month during the winter heating season, not a year-round reduction. TeraWulf has also agreed to cover the estimated financing costs of building Kentucky Power's planned 760-MW combined-cycle plant at Big Sandy, on top of its standard service charges. Kentucky Power pitched that piece as a way to make the customers driving new demand cover its cost. It is a financing commitment, and the plant's construction bill stays with the utility.
Everything known about the deal so far comes from the two companies. Kentucky Power says it will file the amended contract and seek approvals later this year, and until then the collateral requirements and other protections it mentions are undisclosed.
Large-Load Rules Already Set a Floor
Kentucky's regulators set baseline terms for this kind of customer last year. In a March 2025 order, the commission approved special conditions for customers adding 150 MW or more of new load. The tariff sheet that followed required a 20-year initial contract and a minimum monthly bill based on at least 90% of the customer's demand. It also called for collateral equal to 24 times the previous maximum monthly non-fuel bill, using the maximum expected bill in the first year. A customer signing up under those rules is taking on an obligation that looks a lot like long-term debt, and the amendment could tighten it further.
Transmission Sets the Pace
Serving the campus requires new high-voltage lines. Kentucky Power's Muskie project calls for a 765-kilovolt (kV) substation named Venator in Boyd County, about 2.5 miles of 765-kV line and two parallel 345-kV lines totaling roughly 6 miles. The substation application is due this month and the line application in January, with service targeted for October 2028. Residents can review possible routes at an October 15 open house, and comments are due October 29.
The 2029 date for the second phase depends on those lines arriving on time, a reminder that power timelines now set corporate schedules. Developers comparing sites will watch the filed contract for who pays if construction runs over, the load arrives late or TeraWulf leaves early, terms that increasingly decide where projects go.
