PPL Corporation's utilities, Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU), have reached a settlement agreement enabling the construction of approximately 1.3 gigawatts (GW) of gas-fired generation capacity to serve growing data center demand and other commercial loads in Kentucky.

The agreement, filed with the Kentucky Public Service Commission (PSC), calls for approval of two 645-megawatt (MW) combustion turbine units at separate plants, expected to come online in 2030 and 2031. It also includes the installation of a selective catalytic reduction system at the coal-fired Ghent generating station's 485-MW Unit 2.

This deal delays the retirement of the 297-MW coal-fired Mill Creek 2 unit--previously set for 2027--until the new gas-fired unit Mill Creek 6 starts operations in 2031. LG&E and KU will evaluate whether Mill Creek 2 should operate beyond that date.

The settlement also withdraws an earlier proposal for a four-hour, 400-MW battery electric storage system at LG&E's Cane Run plant, though the utilities may pursue a similar project via competitive bidding.

The agreement requires LG&E and KU to issue requests for proposals for renewable energy and storage by mid-2026, aiming for PSC approval of selected projects by 2028's end. Annual reporting on participation in the Southeast Energy Exchange Market is also mandated starting in 2026.

PPL estimates a total spend of about $4.1 billion on the initial plan, including roughly $900 million for the battery storage project. The company maintains its overall $20 billion capital investment plan through 2028.

The PSC will hold a hearing beginning August 4, with a decision expected by Q4 2025.