Powering Kentucky’s Growth, Together

As Kentucky’s largest energy company, LG&E and KU have a responsibility to provide safe, reliable and affordable service to all customers—residents, small businesses, manufacturers and new industries alike.

That includes supporting new businesses that bring jobs, investment, and long-term growth to the communities we’re proud to serve.

When new or expanding projects are proposed, our role is clear: provide energy in the most reasonable and least-cost manner—while continuing to serve all customers safely and reliably.

We perform extensive studies to thoroughly evaluate the effects of new energy load when there’s a request for new or expanded electric service by a large customer, like a data center, manufacturing plant or residential complex.

We use these studies to help ensure we make any necessary system enhancements to continue providing safe, reliable service for all customers.

We’re also committed to fairness in how all costs are managed: 

• New customers, including data centers, pay for the infrastructure located on their property and dedicated to only serving them.
• In some cases, we use tariffed opportunities, like our Excess Facilities Rider, which allows us to build customer-specific infrastructure and recover those costs through direct payments and agreements with a customer and not through base rates.
• All customers benefit from the broader grid improvements tied to system-wide growth.
• Our rates, programs and tariffs are reviewed and approved by the Kentucky Public Service Commission (KPSC) to ensure they remain fair, just, and reasonable.

In fact, major projects like the PowerHouse–Poe Louisville Data Center are designed to help strengthen the grid for everyone. The project includes a $28.4 million electric infrastructure upgrade that will become a permanent asset improving reliability for nearby homes and businesses.

From new factories and housing developments to high-tech facilities like data centers, economic development is happening across Kentucky. Just this March, Governor Beshear announced Kentucky placed in the top 5 for economic development projects per capita in the 2024 Governor’s Cup rankings — marking the fifth year in a row.

In 2024, LG&E and KU supported 76 business projects — adding more than 3,100 new jobs and driving $2.8 billion in investment across Kentucky. Nearly half of the state’s announced investments that year were in our service area.

That growth drives higher energy demand — and we plan for it carefully.

LG&E and KU forecasted last fall through their Integrated Resource Plan record-breaking economic growth and data center development. That projection remains on track and is not dependent on any one customer or project. Instead, it reflects what’s happening across the board: significant, sustained growth in the company’s service areas.

The PowerHouse–Poe Louisville project is one example of that momentum: a planned $11.1 billion private investment—one of the largest in Kentucky’s history—that’s projected to generate roughly $5.4 billion in regional economic output and create about 1,700 construction jobs through its four-year build.

Once operational, the campus is expected to support more than 500 ongoing jobs (210 direct, 332 indirect and induced) with average wages over $110,000 per year, and deliver more than $68 million in local tax revenue annually, including an estimated $45.8 million per year for Jefferson County Public Schools.

To prepare for continued growth, we’re investing in advanced, more efficient generation, and smarter, more resilient infrastructure, including:

• New generation: LG&E and KU are investing in new generation to keep pace with Kentucky’s rapid economic growth and further ensure safe, reliable and affordable service. Construction is underway on a 640-megawatt natural gas combined-cycle unit at Mill Creek in Louisville, expected online in 2027, along with a 125-megawatt battery storage system at E.W. Brown in Harrodsburg and two 120-megawatt solar facilities in Mercer and Marion counties. The utilities have also received approval to build two additional highly efficient 645-megawatt natural gas combined-cycle units—Brown 12 and Mill Creek 6—and to install new environmental controls at Ghent Unit 2. These projects will strengthen reliability and support Kentucky’s continued economic momentum.
• Ongoing system enhancements: Modernizing our grid, substations, pipelines and infrastructure to support 24/7 reliability.

Projects like PowerHouse–Poe also demonstrate that new large-scale developments can bring shared community benefits—improved grid reliability, new educational partnerships with institutions like the University of Louisville, and expanded broadband and fiber capacity that help local businesses and households access faster, more reliable internet service.

Data centers are facilities where digital services — like storing files and images we want to save for later, adding photos and videos to our social media accounts, watching videos and shows online and through streaming services, searching online for information or using AI — are powered and managed. They’re essential to modern life, and they do require significant amounts of energy. Each data center site is unique, and there is no one-size-fits-all approach.

In 2025, we announced our first hyperscale data center customer: a joint venture between PowerHouse Data Centers and Poe Companies. It will be a cutting-edge data center campus, and the first 130 megawatts is planned to come online in 2026.

While some customers have questions about data centers, here’s what’s important to know: 

• Kentucky’s legislature created a tax incentive program to attract data centers, citing job creation and economic benefits.
• Each project will be studied carefully before we connect it to our system.
• We’ve proposed a new rate category — Extremely High Load Factor Service — for large energy users, such as data centers, ensuring fairness and transparency.
• Kentucky already hosts several data centers statewide, and each data-center job supports on average six additional jobs in the local economy — a multiplier effect of growth.
• Nationwide, data center energy use is growing, but these facilities also create long-term fiscal benefits. In Kentucky, data centers can return more than 13 times the local tax revenue compared to the public service costs they generate — and often fund local infrastructure improvements that enhance reliability for surrounding customers. 

More and more each day, we all rely on technology in our professional and personal lives. Consider the amount of increased electricity the grid and world needed when lightbulbs were introduced as a widely adopted technology. Or when automakers started mass-producing cars and steel. Our economy is growing technologically, and computing power is the source of this growth. And the number one input for producing this technology and data is electricity.

Globally, energy demand from data centers is accelerating:

• Electricity use by tech giants like Meta and Microsoft doubled from 2017 to 2021.
• AI searches require up to 10x more energy than traditional ones.
• AI chips need 10x more cooling than traditional cloud hardware.
• Data center energy use could double again by 2026.

That’s why it’s essential to plan ahead — and why Kentucky’s balanced energy mix, strong grid, and fair regulatory process put us in a position to manage this growth responsibly while protecting customers.

Q: Will building a data center raise everyone’s rates?

A: No, customers like data centers pay for the facilities that serve only them.  

When broader upgrades are needed to meet overall system demand, we may seek cost recovery through our base rates – but any proposed changes are always reviewed by the Kentucky Public Service Commission to ensure fairness.

In fact, projects like PowerHouse–Poe help strengthen reliability for everyone by co-funding the necessary grid upgrades that remain long-term community assets.

Q: Will it result in greater costs for residential customers?

A: We have an obligation to ensure energy rates are fair, just, and reasonable for all customers, which includes seeking to have individual customers be responsible for the costs of work or facilities that serve only them.

The PowerHouse–Poe project demonstrates this principle in action: large customers fund the infrastructure that serves them directly, not other ratepayers.

Q: What happens if a project doesn’t go forward?

A: When working with prospective customers who require large amounts of energy, we establish project agreements that outline certain requirements to ensure we’re protecting customers from any unintended impacts.

Q: How does this benefit the community?

A: Data centers can become among a community’s largest taxpayers. The PowerHouse–Poe project alone is estimated to contribute more than $68 million in local taxes annually, including $45.8 million to Jefferson County Public Schools—roughly a 3% boost to the district’s annual budget—along with additional support for local fire protection and city services.

Q: How do data centers impact jobs?

A: In addition to approximately 210 permanent roles, the PowerHouse–Poe project is expected to support more than 300 indirect and induced jobs, from electricians to HVAC technicians and local service providers.