Kentucky Power, TeraWulf Finalize Expanded Agreement Providing for $100 Million in Customer Benefits

Kentucky Power has finalized an amended agreement that would double its contracted electric demand with TeraWulf Inc. (Nasdaq: WULF) while delivering significant long-term benefits for customers and communities across eastern Kentucky.

If approved by the Kentucky Public Service Commission, the amended agreement is expected to provide $100 million in winter bill credits funded by TeraWulf for Kentucky Power's residential customers over the first 10 years of the contract. For a typical residential customer, the bill credits could amount to approximately $25 per month during the winter heating season, with credits beginning in 2029.

The expanded agreement would increase contracted electric demand at TeraWulf's Muskie Data campus in Grayson, Kentucky, from 500 megawatts (MW) to 1 gigawatt (GW). It also advances planned delivery of the second 500-MW phase from 2030 to 2029, subject to Commission approval and Kentucky Power's construction schedule. The campus's planned expansion is expected to generate new economic activity through infrastructure investment, construction activity, permanent jobs and new tax revenue for local communities.

These investments will help support the continued modernization of Kentucky Power's system. In addition to paying all applicable service charges, TeraWulf has agreed to pay the estimated financing costs associated with construction of Kentucky Power's planned 760-MW combined-cycle generation facility at Big Sandy, helping ensure the costs associated with serving increased demand are not shifted to existing customers. 

"At Kentucky Power, we are working to bring new businesses and economic opportunity to eastern Kentucky, creating meaningful benefits for the customers and communities we serve," said Cindy Wiseman, president and chief operating officer of Kentucky Power. "By providing a decade's worth of direct residential bill credits, supporting critical energy infrastructure investments and helping ensure the costs associated with new demand are paid by the customers driving that growth, this agreement demonstrates how economic development can create lasting value for our customers and communities."

"This agreement shows how large-scale investment can support both economic growth and meaningful benefits for existing utility customers," said Paul Prager, chairman and chief executive officer of TeraWulf. "Kentucky Power has been a strong partner in advancing Muskie's development. Expanding contracted power to 1 GW and bringing the second phase forward to 2029 positions us to meet strong customer demand and bring lasting investment to eastern Kentucky."

The agreement also includes collateral requirements and other financial protections designed to safeguard Kentucky Power customers. Kentucky Power plans to file the amended contract and seek related regulatory approvals later this year.

Learn more about how Kentucky Power protects customers while supporting economic development and large-load growth at www.kentuckypower.com/company/about/rates/data-centers.

About Kentucky Power
Kentucky Power, with headquarters in Ashland, provides electric service to about 163,000 customers in 20 eastern Kentucky counties, including Boyd, Breathitt, Carter, Clay, Elliott, Floyd, Greenup, Johnson, Knott, Lawrence, Leslie, Letcher, Lewis, Magoffin, Martin, Morgan, Owsley, Perry, Pike and Rowan. Kentucky Power is an operating company in the American Electric Power (Nasdaq: AEP) system. For more information, visit kentuckypower.com.

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SOURCE Kentucky Power