TeraWulf's 1-gigawatt Muskie contract puts the next test in front of Kentucky regulators

TeraWulf now has a gigawatt of contracted power on paper in eastern Kentucky. Whether it gets that power on the schedule it wants depends on the Kentucky Public Service Commission and on a utility construction program that has yet to break ground.

On Oct. 5, TeraWulf said it had executed an amended and restated electric service agreement with Kentucky Power, an American Electric Power company, raising contracted power at its Muskie Data Campus to 1 gigawatt from 500 megawatts. A securities filing shows the agreements were signed on Oct. 1. The amendment pulls the second 500-megawatt phase forward to 2029 from 2030, while the first phase remains targeted to begin ramping in 2028.

Kentucky Power's account of the same deal shows what the commission will weigh. If approved, TeraWulf would fund $100 million in winter bill credits for the utility's residential customers over the contract's first 10 years, about $25 a month for a typical household in heating season starting in 2029, and would cover the estimated financing costs of Kentucky Power's planned 760-megawatt combined-cycle plant at Big Sandy, with collateral requirements on top.

That structure is built to answer the question regulators across the country are now asking of large-load contracts: who pays if the demand arrives late, or not at all. Kentucky Power has said it plans to file the amended contract and seek related approvals later this year, so a ruling may not come until 2027. The 2029 date for the second phase is explicitly subject to that approval and to the utility's construction schedule, and a 765-kilovolt/345-kilovolt substation tied to the regional grid is still being built to serve the site.

"Customer interest in Muskie has been tremendous, and power availability is central to those conversations," said Paul Prager, TeraWulf's chairman and chief executive. "Securing the next 500 MW and moving its planned delivery into 2029 gives us greater flexibility to meet prospective customers' deployment needs."

The company has not named a tenant for Muskie, and that is the number investors will watch for next. Until a tenant signs, the cost of that commitment, including the generation financing costs it agreed to cover, sits with TeraWulf. The company said in the same filing that it intends to upsize its senior secured revolving credit facility and raise more senior secured debt to back letters of credit tied to its utility agreements. The company also said it is evaluating whether the campus could one day support up to 2 gigawatts, which would require more utility planning, infrastructure and agreements.

Muskie, bought in May 2026, sits alongside TeraWulf's Justified Data Campus in Hawesville, whose service agreement the Kentucky commission approved in August, and the Lake Mariner campus in New York, where bitcoin-mining infrastructure is being repurposed for contracted high-performance computing. TeraWulf is also pursuing additional campuses in Kentucky, New York and Maryland.