PPL Electric’s “advanced” stage data center pipeline jumped 12% to 28.3 GW by 2034, up from 25.2 GW three months ago, company officials said Friday during PPL Corp.’s first-quarter earnings conference call.
The pipeline ramps up from 0.6 GW expected online this year to 20.7 GW in 2030, according to the Allentown, Pennsylvania-based company’s earnings call presentation. Advanced stage projects have signed agreements with developers and PPL will be paid for project-related work even if the projects don’t advance, the company said.
PPL is also advancing its unregulated joint venture with Blackstone Infrastructure that would build generation for data centers, according to Vincent Sorgi, PPL president and CEO. “Based on the progress to date with the hyperscalers, we are executing multiple gas turbine reservation agreements and have submitted requests for multiple generation projects into PJM's interconnection queue,” Sorgi said.
An initial project announcement could come this year, according to Sorgi. “Based on where we stand today and the momentum that we're seeing, I'd be surprised if we weren't … announcing something meaningful this year,” he said.
The financial commitments needed to secure turbine reservations “provides a concrete indication of demand for colocation in PPL's service territory,” Jefferies equity analysts said in a note on Friday.
The joint venture could participate in the PJM Interconnection’s planned reliability backstop auction for large loads, but that will depend on the program’s rules, which are still being worked out, according to Sorgi.
“There's quite a bit of work that needs to be done to ensure that the costs that are related to any backstop auction are actually borne by the large loads,” Sorgi said. “It's not clear as written or as proposed that we would actually get that result.”
In Pennsylvania, PPL has contracts with major data center companies, including QTS Data Centers, Amazon Web Services, PowerHouse Data Centers and CoreWeave, according to Sorgi. About 5 GW of the utility’s advanced stage projects are under construction, he said.
In Kentucky, PPL’s Louisville Gas and Electric and Kentucky Utilities subsidiaries have an 11.9 GW data center pipeline, up from 8 GW last quarter, Sorgi said. An additional 1 GW of non-data center large load is also under development in Kentucky.
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 battery storage — partly because it can be built quickly — and a 266-MW pumped storage project being developed by Rye Development, he said. It could also include gas-fired generation, depending on how much load is coming onto the utilities’ systems, he added.
Longer term, LG&E and KU are working with X-energy on a phased approach to possibly adding small modular nuclear reactors to support large load customers in Kentucky, Sorgi noted.
“That means starting with early stage evaluation and site readiness work closely aligned with state policy support, clear customer demand and financial support, particularly from large load customers and cost recovery frameworks that protect customers and shareowners,” Sorgi said. “Any decision to move forward would be gated by economics, regulatory certainty and our long-standing commitment to capital discipline.”
While PPL’s utilities may have major load additions on the horizon, its weather-normalized electric sales in Kentucky fell 1.5% in the first quarter, with industrial sales declining by 2.7%, according to the earnings presentation. Weather-normalized sales in Pennsylvania declined by 0.2%, with industrial sales falling by 2.5%.
PPL plans to seek permission by July from state and federal regulators to merge LG&E and KU into one utility, the company said in its quarterly report filed with the U.S. Securities and Exchange Commission.
In Rhode Island, utility regulators are reviewing RIE’s two-part electric and gas rate hike proposal. It calls for increasing rates by $181 million and $49 million in the second year, according to PPL’s SEC filing. Under the proposal, electric revenue would increase by 18.2% in the first year, which would start on Sept. 1, and 3.6% in the second year.
However, the Rhode Island Division of Public Utilities and Carriers last month called for RIE's rate proposal to be cut to $75.4 million.
RIE recorded a $26 million liability in the first quarter for the estimated amount it expects to refund ratepayers under a recent Federal Energy Regulatory Commission decision to lower the return on equity New England transmission owners can earn.
On the financial front, PPL’s first-quarter net income increased to $452 million, or 60 cents/share, up 9% from $414 million, or 56 cents/share, in the year-ago period, largely driven by rate hikes in Kentucky, the utility company said. Revenue grew to $2.8 billion in the quarter from $2.5 billion in the first quarter three months last year.
