Concerns Raised Over Proposed Gas-Fired Power Plants in Kentucky

Strategic Insights -

Kentucky's utility regulator, the Public Service Commission, heard concerns from residents, local officials, and organizations over a proposal to build several billion dollars of natural gas-fired power generation to meet prospective demand from data centers. The electric utility, Louisville Gas and Electric, and Kentucky Utilities, has requested permission to build two gas-fired combined cycle power plants, estimated to cost $2.7 billion, including transmission costs. Concerns centered around the substantial costs of the power plants, projected demand from data centers, and potential public health impacts from fossil fuels.

Key Takeaways:

  • The proposed gas-fired power plants are estimated to cost $2.7 billion, including transmission costs, to meet "unprecedented" projected electricity demand from data centers.
  • Concerns were raised about the substantial costs of the power plants, which could burden ratepayers, especially low-income residents who are already struggling to pay their utility bills.
  • Virginia Bush, a faith community nurse, expressed concerns about the public health impacts of fossil fuels, citing a recent analysis linking exposure to fossil fuel pollution with an increased risk of dementia.
  • Betsy Ruhe, a Louisville Metro Council member, urged the PSC to consider the costs to low-income ratepayers and the potential for higher utility bills.
  • Felicia Nu'Man, director for the Center of Justice and Policy Initiatives at the Louisville Urban League, argued that ratepayers should not have to pay for the energy infrastructure servicing "billion-dollar tech companies."
  • LG&E and KU proposed a settlement that would also call for delaying the retirement of a coal-fired power plant unit.
  • The utility cited a mechanism proposed before the commission that would take revenues collected from new data centers to partially and temporarily offset the costs of one of the two proposed gas-fired power plants.
  • Advocates are skeptical that this protection will be enough, pointing out the risk that data centers may not be located in the state, and questioned why data center revenues aren't offsetting both gas-fired power plants.

Statistics:

  • The two proposed gas-fired power plants have a combined capacity of 1,290 megawatts.
  • The estimated cost of the power plants, including transmission costs, is $2.7 billion.
  • The projected electricity demand from data centers is expected to increase by 35-40% by 2032 compared to 2024.
  • According to LG&E and KU, data center revenues would pay a minimum of $1.4 billion over a 15-year contract.

Sources:

  • https://kentuckylantern.com/2025/04/11/repub/as-demand-for-ai-rises-so-do-power-thirsty-data-centers/
  • https://kentuckylantern.com/2025/08/01/kentuckys-largest-utility-proposes-more-gas-fired-power-plants-delay-retirement-of-coal-fired-unit/
  • https://www.cam.ac.uk/research/news/long-term-exposure-to-outdoor-air-pollution-linked-to-increased-risk-of-dementia
  • https://nortonhealthcare.com/wp-content/uploads/what-is-faith-community-nurse-update.pdf