Lg&E, Ku Propose $3.7B Power Buildout: 1.3 Gw Of New Gas Plants, $153M Coal Unit Upgrade

PPL subsidiaries Louisville Gas and Electric Company (LG&E) and Kentucky Utilities Company (KU) have proposed to upgrade environmental controls at a 1974-built coal unit, build two new gas-fired power plants at a combined cost of $2.8 billion, and add 400 MW of battery storage. The measures seek to significantly boost the companies’ capacity to ready the region for a dramatic surge in power demand.

LG&E and KU on Feb. 28 requested approval for 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.   

The companies’ joint application proposes four major projects.

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, the filing suggests.

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.

LG&E and KU’s 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 compared with other markets where data center development has been thriving and reaching a point of market saturation,” he said.

On Friday, LG&E and KU underscored the significance of the new power projects. “This is an exciting time for Kentucky as the interest in locating new and expanding businesses continues to grow,” said John R. Crockett III, LG&E and KU president and PPL chief development officer on Friday. “These investments in our system will allow us to continue serving our customers safely and reliably while meeting our regulatory obligation and the growing economic interest in the commonwealth—all while maintaining affordability.”

Mill Creek Generating Station in Louisville, Kentucky. Courtesy: GE Vernova

LG&E and KU’s existing dispatchable generation resources are approximately 7,264 MW in 2025, with coal still a majority of its portfolio. To comply with environmental requirements and energy efficiency measures, as of December 2024, the companies had retired approximately 1,500 MW of coal power since 2010. At the end of 2024, the companies retired Mill Creek 1, a 300-MW coal-fired power unit. Mill Creek 2 is slated for retirement after 2027. Retirements are also planned for two simple-cycle gas-fired plants: the 47-MW Haefling 1-2 in 2026, and 47-MW Paddy’s Run 12 in 2026.

However, in a pivotal decision in November 2023, the Kentucky Public Service Commission denied the companies’ proposed retirement of KU’s 486-MW Ghent Unit 2, citing a need for additional clarity regarding environmental compliance regulations. The KPSC had previously approved other major generation changes, including a 640-MW NGCC at Mill Creek, a 125-MW battery system, and multiple solar projects. In August 2024, the companies announced they would replace two aging coal generation units at Mill Creek—a combined 600 MW—with a 645-MW GE Vernova hydrogen-ready 7HA.03 gas turbine.

 At the end of 2024, LG&E and KU had a combined owned generating capacity of 7,264 MW (LG&E: 2,466 MW, KU: 4,798 MW). The companies’ 2024 electricity generation by fuel source is reflected in the table above. Source: PPL (10-K, Feb. 2025)

KU’s Ghent 2 is part of the larger 2-GW, four-unit Ghent Generating Station, the largest coal-fired power plant in the LG&E and KU system. The plant, which began commercial operation in 1973, uses subcritical coal combustion technology, and is already equipped with electrostatic precipitators and flue gas desulfurization (FGD) systems on all units to control emissions. A $600 million FGD installation project completed in 2009 equipped all four units with scrubbers. New 662-foot chimneys were built for Units 1 and 4, including monitoring systems to measure air quality and ensure regulatory compliance.

The $152 million project to install an SCR system will ensure Ghent 2 will control its nitrogen oxide emissions and comply with the federal National Ambient Air Quality Standards (NAAQS) for ozone, the filing suggests. 

As Philip Imber, director of Environmental Compliance at PPL Services, explained, Kentucky is no longer subject to the 2023 Good Neighbor Rule due to legal challenges and subsequent court rulings that invalidated the U.S. Environmental Protection Agency’s (EPA’s) disapproval of Kentucky’s State Implementation Plan (SIP). In December 2024, the U.S. Court of Appeals for the Sixth Circuit vacated the EPA’s denial of Kentucky’s SIP and remanded it to the agency, effectively blocking the application of the Good Neighbor Plan in the state. The decision has meant that Kentucky reverts to compliance under the earlier Revised Cross-State Air Pollution Rule (CSAPR) Update, rather than the more stringent requirements imposed by the 2023 Good Neighbor Plan, Imber said. However, the EPA “remains obligated to drive compliance with the 2015 Ozone NAAQS, and adding an SCR to Ghent 2 is an obvious target for such compliance efforts. Thus, adding a Ghent 2 SCR now will help ensure the ongoing year-round availability of Ghent 2, which is part of the least-cost resource plan,” he said.

Beyond the Good Neighbor Plan, the EPA’s regulatory framework includes additional rules that could affect coal-fired generation. Most notable are the Greenhouse Gas (GHG) Rule and the Effluent Limitation Guidelines (ELG). The GHG Rule, finalized in May 2024 under Clean Air Act Sections 111(b) and 111(d), imposes strict emissions limitations on coal plants, requiring them to implement carbon capture by set deadlines. However, the rule’s future is uncertain owing to legal and political opposition, including directives from the Trump administration aimed at rescinding it. “President Trump’s day-one executive orders, coupled with his campaign commitment to undo the GHG Rule, cast serious doubt on the near-term need to comply with the GHG Rule,” he said.

Likewise, the 2024 ELG Rule imposes stringent zero-discharge requirements for FGD wastewater, bottom ash transport water, and combustion residual leachate. Compliance deadlines extend to 2029, but facilities that cease coal operations by 2034 can qualify for exemptions. The rule builds on previous ELG standards but significantly tightens discharge limitations. “As with the GHG Rule, it is reasonably possible and perhaps likely that the Trump administration will seek to rescind the 2024 ELG standards. Importantly,  although the EPA had the legal authority to implement the 2024 ELG standards, it was not obligated to implement revised standards,” said Imber. “Indeed, I am unaware of any reason the 7 EPA could not rescind the 2024 ELG standards.”

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).