KY utility regulator OKs electricity contract for TeraWulf’s Hancock County data center project
The Kentucky Public Service Commission approved an electricity contract for TeraWulf's data center project in Hancock County, despite opposition from residents concerned about rising electricity bills, noise, air, and water pollution. The project, located at a repurposed aluminum smelter, will use an existing 482-megawatt grid connection and is expected to use less water and emit fewer pollutants than the previous plant. The PSC approval moves the project forward despite local concerns and a recent executive order from Governor Beshear setting requirements for data center operators statewide.
The Kentucky Public Service Commission (PSC) has approved an electricity contract for TeraWulf's data center project in Hancock County, Kentucky. This decision comes after a hearing where residents voiced concerns regarding potential impacts on electricity bills, air and noise pollution, and water usage.
The project, known as the Justified Data Campus, involves repurposing an idle aluminum smelter. TeraWulf asserts that the data center will consume less water and emit fewer air pollutants than the former smelter. Under its agreement with Big Rivers Electric Corp. and Kenergy, TeraWulf claims the cost of powering the data center will not be passed on to local residents. The PSC approved TeraWulf's use of an existing 482-megawatt connection, with electricity sourced from the Midcontinent Independent System Operator (MISO). A key part of the contract requires TeraWulf to curtail its electricity use during MISO grid emergencies to prevent rolling blackouts.
Maryland-based TeraWulf recently secured a 20-year agreement with AI developer Anthropic, making Anthropic the primary user of the Justified Data Campus. This development follows Kentucky Governor Andy Beshear's executive order, signed earlier in August, mandating that data center operators cover their own electricity costs, safeguard environmental quality, pay appropriate taxes, and engage constructively with communities. TeraWulf subsequently filed an energy plan with state regulators, pledging compliance.
Across Kentucky, the proliferation of data center proposals has led various local governments to enact development moratoriums, largely due to public opposition. Lawmakers are also reassessing the necessity and duration of tax incentives previously granted to data centers.