TeraWulf Inc. and Kentucky Power, an AEP company, have signed amended agreements that would raise contracted capacity at TeraWulf's Muskie Data Campus in eastern Kentucky from 500 MW to 1 GW, according to a Form 8-K TeraWulf filed with the Securities and Exchange Commission on Oct. 5, 2026. The agreements were executed on Oct. 1 by TeraWulf's wholly owned subsidiary DB Long Hunts Data LLC and Kentucky Power Company. Parts of the deal, including the earlier timing of the second phase, still need approval from the Kentucky Public Service Commission.

The agreements are an amended and restated transmission-infrastructure agreement and energy service agreement. Under them, the second 500-MW phase at Muskie would move from 2030 to 2029, "subject to Kentucky Public Service Commission approval and Kentucky Power’s construction schedule," the 8-K says. The first 500-MW phase remains targeted to begin ramping in 2028.

What the utility says customers get

Kentucky Power announced the deal on Oct. 5 in a release that places the campus in Grayson, Ky. The utility said the amended agreement would double contracted demand there from 500 MW to 1 GW.

The release describes two commitments from TeraWulf. The first: if the Kentucky PSC approves the amended agreement, it 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. Kentucky Power said the credits could amount to about $25 a month during the winter heating season for a typical residential customer, beginning in 2029. The second: in addition to paying all applicable service charges, TeraWulf agreed to pay the estimated financing costs for construction of Kentucky Power's planned 760-MW combined-cycle generation facility at Big Sandy. The agreement also includes collateral requirements and other financial protections, the utility said.

Cindy Wiseman, Kentucky Power's president and chief operating officer, said in the release that "this agreement demonstrates how economic development can create lasting value for our customers and communities." TeraWulf Chairman and CEO Paul Prager was quoted in the same announcement: "Kentucky Power has been a strong partner in advancing Muskie’s development."

Financing on TeraWulf's side

The 8-K also addresses the credit support behind the company's utility power agreements. TeraWulf said it intends to upsize its existing senior secured revolving credit facility and is seeking additional senior secured debt to support letter-of-credit needs tied to its long-term power development partnerships with utilities. The revolver upsize is subject to customary closing conditions, and the filing states that "there can be no assurance that the Company will obtain any additional financing."

The transmission build

Serving the campus requires new high-voltage infrastructure. In an Oct. 2 notice, Kentucky Power described planned transmission improvements in Boyd County to serve the Muskie Data Center Campus at EastPark Industrial Park. The proposal includes:

  • a new 765-kV substation, the Venator Substation;
  • two 765-kV lines totaling about 2.5 miles, connecting the substation to an existing line; and
  • two parallel 345-kV lines of about 3 miles each, with study areas in western Boyd County.

"Proposed line routes have not been selected," the utility said. Kentucky Power held a public open house on the project on Oct. 15 in Catlettsburg; written feedback from landowners and the community is requested by Oct. 29. The utility's schedule, which it says is subject to change, puts the facilities in service in October 2028, the same year TeraWulf has targeted for first-phase ramp.

Context

TeraWulf acquired the Muskie site in May 2026 for phased development as an AI and high-performance computing campus, according to the company's Oct. 5 announcement. The company said it continues to evaluate the campus's potential to support up to 2 GW over time, subject to additional utility planning, infrastructure and agreements, and that development will proceed consistent with Gov. Beshear's Executive Order on Data Center Development (2026-494). TeraWulf also has a campus in Hawesville, Ky.: in August, the Kentucky PSC approved a separate electric service agreement for its Justified Data Campus there, finding its terms protected existing customers. "Customer interest in Muskie has been tremendous, and power availability is central to those conversations," Prager said in the company's release, adding that moving the second phase into 2029 "gives us greater flexibility to meet prospective customers’ deployment needs."

What Happens Next

  • Oct. 29, 2026: Deadline for public feedback to Kentucky Power on the Muskie transmission project, nine days from Oct. 20.
  • October 2026: Kentucky Power plans to file its application with the Kentucky PSC for the Venator Substation.
  • Later in 2026: Kentucky Power plans to file the amended contract and seek related regulatory approvals. The bill-credit program and the 2029 start for the second phase depend on the commission's approval. No docket number has been published yet.
  • Early 2027: Kentucky Power plans to file the application for the transmission lines and begin substation construction. The utility anticipates a PSC decision on the transmission filings in spring 2027.
  • November 2027: Transmission line construction is scheduled to begin, according to Kentucky Power's schedule.

Sources