TeraWulf Inc. said Oct. 5 that it doubled the contracted electric service for its planned Muskie Data Campus in eastern Kentucky to 1 GW, speeding up the project’s 500 MW second phase within a year at a site where Kentucky Power is preparing major transmission construction.
The amended electric service agreement moves the planned delivery of the second 500 MW from 2030 to 2029. The initial 500 MW phase remains scheduled to begin ramping up in 2028. The additional service is subject to Kentucky Public Service Commission approval and Kentucky Power’s construction schedule.
Kentucky Power, an American Electric Power subsidiary, plans to build the 765 kV Venator substation in Boyd County, two 765 kV overhead transmission lines totaling about 2.5 miles, and two parallel 345 kV overhead lines totaling another 6 miles. The 765 kV lines would connect Venator to an existing 765 kV line, while the 345 kV circuits would extend from the new substation to the Muskie campus in the EastPark industrial park.
The company’s current schedule calls for submitting its substation application to state regulators this month, followed by a transmission line submission in January. Construction of the substation is scheduled to begin in February 2027 and construction of the transmission line in November 2027, with the goal of the system entering service in October 2028. The schedule remains subject to approval and regulatory changes.
Project materials do not identify construction costs or contractors, and no final transmission routes have been selected.
Expansion of power units
TeraWulf acquired the roughly 285-acre Muskie site from Industrial Equity Partners in May. The property is located within the 1,000-acre EastPark Industrial Park near Grayson in northeastern Kentucky, about 20 miles southwest of Ashland and zoned for data center use.
The company says it continues to evaluate expansion of Muskie up to 2 GW, subject to planning, infrastructure and additional service agreements.
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new intelligent AI search tool.
Ask ENR →
Kentucky Power is evaluating the routes of two new 765 kV lines connecting the planned Venator substation to the existing transmission network and two parallel 345 kV lines extending to TeraWulf’s Muskie data campus. Click on the image to enlarge.
Courtesy Kentucky Power/AEP
“Securing the next 500 MW and moving its expected delivery to 2029 gives us greater flexibility to meet the deployment needs of potential customers,” the company’s president and CEO Paul Prager said in a statement. The developer and operator of large-scale AI and high-performance computing data centers has yet to announce a tenant for Muskie.
The amended agreement also ties the development to Kentucky Power’s broader generation plans. If approved by regulators, TeraWulf would fund $100 million in winter bill credits for residential customers over the first 10 years of the contract. The utility would also cover the estimated financing costs associated with the construction of Kentucky Power’s proposed 760 MW combined cycle plant at Big Sandy, in addition to applicable service charges.
Other provisions require guarantees and financial guarantees for existing customers. The terms are intended to ensure that “customers driving this growth pay the costs associated with the new demand,” Kentucky Power President and Chief Operating Officer Cindy Wiseman said in a statement.
Second Kentucky construction
Muskie is TeraWulf’s second major Kentucky data center development, but its power supply strategy differs from the company’s Justified Data Campus in Hawesville.
The Muskie transmission upgrade project is planned for northeastern Kentucky, where TeraWulf is developing its second major data center in the state. Click on the image to enlarge.
Map courtesy of Kentucky Power/AEP
As ENR reported in August, TeraWulf is redeveloping a former aluminum smelter there into a $4 billion-plus AI campus, with Fluor as the general contractor and Anthropic leasing about 401 MW. Justified came with an energized substation and about 482 MW of available transmission capacity; Muskie requires a new high voltage connection to the regional grid.
Residents have questioned whether the Muskie development could increase costs for existing Kentucky Power customers. A roughly three-hour town hall June 1 in Boyd County raised concerns about electricity costs, water use, environmental protection, projected jobs and nondisclosure agreements signed by local officials.
A Boyd County resident separately asked state utility regulators to look at potential ratepayer exposure, generation requirements and grid reliability before approving projects associated with Muskie. Kentucky Educational Television later described the community as divided.
Kentucky Power plans an open house Oct. 15 in Catlettsburg where residents and affected property owners can review potential transmission routes and provide feedback. The company says it will consider public input along with environmental and engineering factors before selecting the final routes and is seeking feedback by Oct. 29.
