PPL Corp.’s joint venture with Blackstone Infrastructure — Invitium Energy — will likely announce at least one deal this year to supply a data center with electricity, Vincent Sorgi, PPL president and CEO, said Friday during an earnings conference call.
PPL and Blackstone formed Invitium last year to build, own and run power plants for data centers in Pennsylvania under long-term energy supply services agreements.
The joint venture has secured sites in Pennsylvania that could support up to 14 GW of new generation, according to Sorgi. It has also entered into reservation agreements for more than 5 GW of combined-cycle gas turbines and the PJM Interconnection has accepted about 5 GW of Invitium’s generating projects in its interconnection queue, he said.
The secured turbines represent up to $15 billion in potential investment through 2032, Sorgi noted. PPL has a 51% stake in the non-utility joint venture.
Meaningful earnings from the joint venture aren’t expected until the turbines come online, which could be as early as 2031, according to Allentown, Pennsylvania-based PPL.
The joint venture could produce income sooner by supplying data center customers with batteries, but the opportunities for energy storage may be limited, Sorgi said.
“While the batteries are certainly the fastest to market, they're also the easiest for the hyperscalers to embed in their designs and just make it part of the data center construction projects,” Sorgi said. “I'm convinced there'll be batteries that are coming on system by 2029, but some of that could be owned directly by the hyperscalers as opposed to third-party generators like Invitium.”
PPL Electric’s advanced data center pipeline increased 12% to 31.8 GW in the second quarter compared to three months earlier. The pipeline includes 11 GW of data centers with electric service agreements that aim to ensure existing customers don’t pay costs related to new data centers, Sorgi said.
Two data centers in PPL Electric’s service territory started taking service in the second quarter, Sorgi noted. They could ramp up to about 2 GW by 2031, he said.
In Kentucky, PPL’s Louisville Gas and Electric and Kentucky Utilities subsidiaries have an 11.6 GW data center pipeline, roughly the same as last quarter, Sorgi said. An additional 2.1 GW of manufacturing and other non-data center large load is also under development in Kentucky.
The utilities’ “probability-weighted” projections indicate 3.7 GW of new load will be online by 2032, more than double the amount the company predicted last year, according to Sorgi.
As a result, LG&E and KU may ask state regulators later this year for permission to add power supply resources to meet the potential load, according to Sorgi. That may include 400 MW of battery storage, a 266-MW pumped storage project being developed by Rye Development and gas-fired combined cycle generation, he said.
Those projects represent $3.5 billion to $4 billion of potential investment to be made between 2027 and 2032, Sorgi said.
It is unlikely an Aug. 6 executive order from Kentucky Gov. Andy Beshear, D, will dampen data center development in the state, according to Sorgi.
The executive order aims to make sure data centers don’t harm ratepayers or the environment. Beshear is requiring data center developers to file long-range energy supply plans with the state showing residential ratepayers won’t be hurt. The order also directed the state Energy and Environment Cabinet to deny permits to any data center site that would negatively impact air or water quality — a provision that could have implications for new proposed gas plants.
Sorgi told analysts he was not worried.
“With our tariff structure that we've gotten approved in the state, we're well positioned within that tariff structure to align very nicely with our governor's executive order,” he said. “So not concerned at all.”
Although PJM aims to hold a backstop reliability auction in late September, Sorgi said PPL expects that bilateral contracting will be the main pathway for adding generation in PJM.
Invitium has not committed to bidding in the backstop auction, although the company offered a proposal into PJM’s matchmaking portion of its backstop capacity process, according to Sorgi.
Meanwhile, consideration of legislation that would allow utilities in Pennsylvania to own generation appears to be on the backburner, according to Sorgi.
“I wouldn't say that it's totally off the table,” he said. “I think [lawmakers] want to see how some of these other things progress to see if they need to pull that lever or not … but there's been so much activity, as you know, at both [the Federal Energy Regulatory Commission] and PJM that that legislation, I don't think, has been the highest priority for obvious reasons.”
