Kentucky Regulators Approve 482 MW Power Deal for TeraWulf Data Campus

TeraWulf Inc. said the Kentucky Public Service Commission approved a power agreement for up to 482 megawatts at its Justified Data Campus in Hancock County. The project reuses the former Century Aluminum Hawesville smelter, tapping existing transmission infrastructure left idle after the smelter closed.

The PSC order, issued Aug. 21, found the retail electric service agreement contains adequate protections for existing customers and appropriately allocates financial risks to TeraWulf. Under the structure, TeraWulf bears market costs, plus transmission and delivery charges attributable to its load. It also covers customer-specific infrastructure costs and credit-support obligations. The rate structure includes demand adders and customer charges that provide incremental contributions to Big Rivers Electric Corp. and Kenergy Corp., the two utilities serving the site.

"Power is the gating factor for AI infrastructure, but how you bring that power to market matters," said Paul Prager, TeraWulf's chief executive officer. "We're paying the costs associated with our load, protecting existing ratepayers, and making a significant long-term investment in Kentucky."

The Commission specifically found that the direct pass-through of market and delivery costs ensures TeraWulf bears the costs attributable to its service. It said the terms do not give TeraWulf an unreasonable preference or subject other customers to prejudice.

TeraWulf estimates it will spend $4 billion to $4.5 billion on site development and the initial data halls, excluding customer computing equipment. The PSC cited the anticipated capital investment, employment and expansion of the local tax base as public-interest benefits. The Commission stated that "the proposed reuse of an existing industrial site, anticipated capital investment, employment, and additional tax base provide further support for the public-interest benefits asserted in the record."

The site was previously home to Century Aluminum's Hawesville smelter, which shut down leaving 482 MW of transmission capacity. The PSC specifically noted the reuse of an existing industrial site. Century Aluminum's stock (CENX) is not currently scored by AlphaScala's quantitative model, but the redevelopment of the property shows the value of industrial assets with embedded power connections. The broader commodities analysis desk tracks similar industrial redevelopments and power-intensive asset repurposing.

Utility analysts said the cost-allocation model could inform future large-load connections as data center demand strains grids across the region. Several large-load applications have come before the PSC this year as the Ohio River Valley attracts new power users. TeraWulf is also developing campuses in New York and Maryland, in addition to its existing Lake Mariner facility in New York. The company operates bitcoin-mining equipment there, portions of which are being repurposed for high-performance computing workloads.

TeraWulf described the Justified structure as a scalable framework: the large-load customer covers project-specific costs, protecting existing ratepayers while enabling new power-intensive development. The company said the approach could be replicated at other sites with stranded transmission capacity.

The PSC order authorizes Big Rivers and Kenergy to implement the agreement. TeraWulf plans to begin site preparation in phases. The company's vertically integrated model combines long-term control of land, power and interconnection infrastructure with in-house energy markets and data center operations expertise.