In a bold move to future-proof Kentucky’s energy landscape, Louisville Gas and Electric Company (LG&E) and Kentucky Utilities Company (KU) have proposed a $2.8 billion investment to upgrade environmental controls at a aging coal unit, build two new gas-fired power plants, and add 400 MW of battery storage. The companies have requested a certificate of public convenience and necessity (CPCN) from the Kentucky Public Service Commission (KPSC) for the additional generation capacity and battery storage. The commission is expected to rule on the regulatory permit request by November 2025. This massive buildout is not just about keeping the lights on; it’s about preparing for a dramatic surge in power demand, driven by a wave of economic development and data center growth.
The proposed projects include the construction of two new 645-MW natural gas combined cycle (NGCC) units, Brown 12 at KU’s E.W. Brown Generating Station and Mill Creek 6 at LG&E’s Mill Creek Generating Station, both expected to be operational by 2031. Additionally, a 400-MW, 4-hour (1,600 MWh) lithium-ion battery energy storage system, Cane Run BESS, is planned for LG&E’s Cane Run Generation Station, with an estimated cost of $775 million. Furthermore, a system for Ghent 2 at KU’s coal-fired Ghent Generating Station is proposed, with an estimated cost of $153 million. The companies said the massive $3.7 billion capacity expansion is required to meet a sharp increase in annual energy requirements in Kentucky—from 32,808 GWh in 2025 to 48,129 GWh in 2032. Seasonal peak demand could rise from 6,230 MW (summer) and 6,146 MW (winter) in 2025 to 8,034 MW (summer) and 7,930 MW (winter) in 2032. Nearly all projected load growth can be attributed to economic development from emerging industries, the companies added. While traditional load (non-economic development) will decline slightly in the short term, with only modest growth expected in the late 2030s, at least 1.8 GW of additional load could come from large-scale, high-load-factor data centers, and another 250 MW from the BlueOval SK Battery Park, which a Ford-SK joint venture is developing in Hardin County. Other economic development projects, including automotive and industrial expansion, could add another 40 MW.
The companies’ estimates are partly rooted in a Kentucky General Assembly measure enacted under HB8 in 2024 that includes tax incentives to attract data centers to Jefferson County. “The General Assembly finds and declares that the authority granted in Sections 37 to 41 and the purposes accomplished are proper governmental and public purposes for which public moneys may be expended, and that the inducement of the location of data center projects within the Commonwealth is of paramount importance to the economic well-being of the Commonwealth.” the legislation declares. On Jan. 16, LG&E announced it secured its first hyperscale data center customer: A joint venture between PowerHouse Data Centers, an American Real Estate Partners (AREP) division, and Louisville-based Poe Companies will develop a 402-MW data center campus in Louisville, Jefferson County, with the first 130 MW coming online by October 2026. The site will be supported by a new LG&E switch station, scheduled for completion in September 2026, and a dedicated on-site substation to ensure reliable power delivery. In testimony filed with the CPCN request, John Bevington, senior director of Business and Economic Development for PPL Services Co., said LG&E and KU are fielding more than 8 GW of economic development load potential, based on a list of prospective customers. “More than 6,000 MW is related to data centers,” he said. “A primary driver of data center development is the availability of power. As noted above, without certainty of available generation and transmission capacity, it will be difficult to fulfill the initiatives of the General Assembly and Governor Beshear in marketing Kentucky to data centers and other large load customers.” Bevington noted Kentucky’s location and resources, including an abundant water supply, make the state attractive to data centers. “Additionally, Kentucky is located in close proximity to major data centers in neighboring states. Based on my discussions with data center developers, I understand there are advantages in latency and redundancy to locating data centers near other data centers. Land in Kentucky is also relatively inexpensive when
