KY regulators approve power deal for major AI data center at former aluminum site
Kentucky's utility regulator approved a 15-year power contract for TeraWulf's proposed hyperscale AI data center at a former aluminum smelter in Hancock County. The 482-megawatt agreement, with Big Rivers Electric Corp. and Kenergy Corp., aims to protect existing customers from costs while addressing local resident concerns about electricity use, water, and noise. This decision clears a significant regulatory hurdle for the multi-billion dollar project, which will redevelop an idle industrial site.
The Kentucky Public Service Commission has approved a 15-year electricity service agreement for TeraWulf's proposed hyperscale data center in Hancock County. The deal, involving Big Rivers Electric Corp. and Kenergy Corp., will provide up to 482 megawatts of electricity to the data center campus planned for the former Century Aluminum Hawesville facility.
The commission concluded that the contract offers adequate protections for existing electricity customers, appropriately assigns financial and operational risks, and sets fair and reasonable rates. TeraWulf celebrated the approval as a "major milestone" for its approach to large-scale data infrastructure development, which is backed by artificial intelligence company Anthropic and represents a multi-billion dollar investment.
Despite the approval, the decision followed a public meeting where Hancock County residents voiced concerns regarding potential electricity cost shifts, water consumption, noise, pollution, and impacts on public health and schools. The commission acknowledged these comments, stating it considered them alongside evidence presented.
The commission emphasized that its decision was limited solely to the electricity contract and does not constitute approval of the data center itself or resolve all environmental questions. TeraWulf, which plans to create 90-100 direct jobs, has submitted environmental studies and committed to complying with Gov. Andy Beshear's executive order on data centers, which includes commitments to taxes, environmental laws, and community engagement.