In Eastern Kentucky, data centers hold worry, promise as energy bills continue to climb
TeraWulf is proposing a 1-gigawatt Muskie Data Campus near Catlettsburg in Boyd County, with Kentucky Power building transmission and substation infrastructure to serve it. Supporters say the project could create jobs, tax revenue and help offset Eastern Kentucky’s high electricity costs, while residents and officials remain concerned about water use, noise, environmental impacts and utility rates.
TeraWulf plans to build the 1-gigawatt Muskie Data Campus near Catlettsburg, potentially making it one of Kentucky Power’s largest customers. The utility is planning new transmission lines and a substation, while TeraWulf has agreed to cover those upgrades and fund a new power plant if state regulators approve the arrangement. Kentucky Power also agreed to provide residential customers with $25 credits during three winter months annually for 10 years beginning in 2029.
The proposal comes as Eastern Kentucky faces coal mine and steel mill closures, population loss and some of the state’s highest electricity bills. Kentucky Power spokeswoman Sarah Lynch and Pikeville City Manager Reggie Hickman said data centers could provide economic and tax benefits, although Pikeville has not offered tax breaks and says it will proceed publicly. Residents and critics remain wary of data centers’ energy and water consumption, environmental effects and potential impact on rates. Gov. Andy Beshear has barred the Kentucky Public Service Commission from approving rate increases that shift data center costs to residential customers, though the order’s legal durability has not been tested.