PPL-Blackstone venture secures 5 GW of gas turbines

PPL Corp.’s joint venture with Blackstone Infrastructure has lined up more than 5 GW of combined-cycle gas turbines as it pursues power supply deals for data centers in Pennsylvania, with at least one customer announcement likely this year, according to PPL President and CEO Vincent Sorgi.

The venture, Invitium Energy, was formed last year to build, own and operate power plants for data centers in Pennsylvania under long-term energy supply services agreements. Sorgi said the company has secured sites in the state that could support up to 14 GW of new generation, and about 5 GW of Invitium’s generation projects have been accepted into the PJM Interconnection queue.

The reserved turbines represent up to $15 billion in potential investment through 2032, Sorgi said. PPL owns a 51% stake in the non-utility venture.

PPL said meaningful earnings from Invitium are not expected until the turbines begin operating, which could happen as early as 2031. Before then, the venture could see some earlier income from battery projects tied to data center customers, although Sorgi said that market may be constrained.

"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."

Data center demand grows in PPL territory

PPL Electric’s advanced data center pipeline rose 12% in the second quarter from three months earlier to 31.8 GW, according to Sorgi. That total includes 11 GW of data centers with electric service agreements designed to ensure existing customers do not bear costs related to new data centers.

Sorgi also said two data centers in PPL Electric’s service territory began taking service in the second quarter and could ramp up to about 2 GW by 2031.

PPL Electric reported 8.4M MWh in second-quarter electric sales, down 0.5% from the same period last year, partly because industrial sales in Pennsylvania fell 4.7%. Weather-normalized sales declined 0.6%. The utility also had more than 6.5 GW of under-construction data center load in its service area, up from 5 GW in the first three months of the year.

PPL posted $247M in second-quarter ongoing earnings, up 3% from $240 million a year ago.

Kentucky load growth and resource plans

In Kentucky, PPL’s Louisville Gas and Electric and Kentucky Utilities subsidiaries have an 11.6 GW data center pipeline, roughly unchanged from last quarter, Sorgi said. Another 2.1 GW of manufacturing and other non-data center large load is also under development there.

According to Sorgi, the utilities’ probability-weighted outlook shows 3.7 GW of new load coming online by 2032, more than double what the company projected last year. As a result, LG&E and KU may ask state regulators later this year to approve new power supply resources. Sorgi said those additions could include 400 MW of battery storage, a 266-MW pumped storage project being developed by Rye Development, and gas-fired combined-cycle generation.

Those projects amount to $3.5 billion to $4 billion of potential investment between 2027 and 2032.

Sorgi said an Aug. 6 executive order from Kentucky Gov. Andy Beshear is unlikely to slow data center development in the state. The order requires developers to submit long-range energy supply plans showing residential ratepayers will not be harmed, and directs the state Energy and Environment Cabinet to deny permits to sites that would negatively affect air or water quality.

"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."

PJM process and Pennsylvania legislation

Although PJM plans a backstop reliability auction in late September, Sorgi said PPL expects bilateral contracting to be the main route for adding generation in the PJM market. He said Invitium has not committed to bidding in the auction, though it did submit a proposal into PJM’s matchmaking portion of the backstop capacity process.

Sorgi also said legislation in Pennsylvania that would allow utilities to own generation does not appear to be moving quickly.

"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."

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