TeraWulf doubles Kentucky power deal to 1 GW and takes on utility costs

TeraWulf has doubled the electricity under contract at its Muskie Data Campus in eastern Kentucky to 1 gigawatt, and the cost of that power reaches well past the meter. Under the amended agreement, TeraWulf would fund $100 million in winter bill credits for Kentucky Power's residential customers. It would also pay the estimated financing costs of the utility's planned 760-megawatt combined-cycle generation plant at Big Sandy, according to Kentucky Power.

The deal moves the campus's second 500-megawatt phase up a year, from 2030 to 2029. That change is subject to approval by the Kentucky Public Service Commission and to Kentucky Power's construction schedule. The first 500 megawatts remain targeted to begin ramping in 2028. A TeraWulf subsidiary, DB Long Hunts Data LLC, signed the amended transmission infrastructure and energy service agreements on October 1, according to the company's 8-K filing. TeraWulf announced the deal four days later.

Kentucky Power gave the residential terms in its own release. If regulators approve, the credits would begin in 2029 and run through the first 10 years of the contract. A typical household could receive about $25 a month during the winter heating season. The utility serves about 163,000 customers across 20 eastern Kentucky counties. In addition to the credits, TeraWulf would pay all applicable service charges and meet collateral requirements and other financial protections. Kentucky Power president Cindy Wiseman described the structure as "helping ensure the costs associated with new demand are paid by the customers driving that growth." The utility plans to file the amended contract and seek regulatory approval later this year.

The August decision on Justified is the closest precedent. In that case, the commission found that the terms adequately protected existing customers and appropriately allocated the costs and risks of serving the project, TeraWulf said. Muskie will also be developed under Governor Andy Beshear's Executive Order on Data Center Development (2026-494).

The Muskie commitment is large relative to TeraWulf's current operating footprint. The company acquired the Grayson site in May 2026 to develop in phases as an AI and high-performance computing campus. Its second-quarter results reported 102 megawatts of revenue-generating critical IT capacity online at its Lake Mariner campus in New York, with another 336 megawatts under construction. Separately, Kentucky regulators approved a 482-megawatt power agreement in August for TeraWulf's Justified Data Campus in Hawesville. TeraWulf also says it is evaluating whether Muskie could eventually support up to 2 gigawatts, which would require further utility planning, infrastructure and agreements.

Chief executive Paul Prager framed the expansion around demand. "Customer interest in Muskie has been tremendous, and power availability is central to those conversations," he said in the company's announcement. "Securing the next 500 MW and moving its planned delivery into 2029 gives us greater flexibility to meet prospective customers' deployment needs."

These commitments are tied to additional financing needs. In the same 8-K, TeraWulf said it intends to enlarge its existing senior secured revolving credit facility. It is also seeking additional senior secured debt to cover letter-of-credit needs tied to its long-term power development partnerships with utilities. The filing states there is no assurance the company will obtain the financing.

On the ground, Kentucky Power is building a 765-kV/345-kV substation connected to the regional transmission network to serve the site. The utility lists construction activity, permanent jobs and new tax revenue among the benefits it expects from the expansion.

A job listing posted under Beowulf Electricity & Data LLC seeks an executive to run steady-state operations across TeraWulf's data center portfolio. The role covers site staffing, maintenance, incident response and budgets for labor, vendors and contractors. It calls for at least 10 years of mission-critical operations leadership and at least two years running liquid-cooled data centers. The executive would work with HR on workforce planning, hiring, retention and succession, and would ensure 24/7 operational coverage. Under the structure the listing describes, a separate operational excellence group manages the handoff from construction to operations. The operations chief takes over once each site is handed off.