LG&E, KU Study 266-MW Kentucky Pumped Storage
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- Louisville Gas and Electric and Kentucky Utilities are studying the proposed 266-MW Lewis Ridge pumped storage project in southeast Kentucky with Rye Development, with construction potentially beginning in December 2027 and going online about four years later.
- Rye Development received a preliminary FERC permit for the project in 2022 and filed a license application in June; the project would be built near Blackmont, Kentucky, on a former coal mine and discharge water from an upper reservoir through two turbines to a lower one.
- The utilities told the Kentucky Public Service Commission they would split ownership 63% (KU) and 37% (LG&E), though they said that allocation could change based on future load and resource planning.
- Jefferies equity analysts said the project's roughly $4.9 million/MW cost "doesn't appear viable without a data center hyperscaler willing to pay for it," even as Rye projects selling capacity at $25–$30/kW-month and producing an average of 717 GWh/year.
- The U.S. Department of Energy's Office of Clean Energy Demonstration awarded the Lewis Ridge project $81 million in funding for clean energy projects on mine lands, part of a $1.2 billion build cost plus roughly $110 million in interest during construction.
- Rye Development CEO Paul Jacob attributed renewed interest in pumped storage to AI demand and growing industrial load, noting the company shifted focus to the technology about four years ago and now has 4+ GW of U.S. pumped storage projects in development.
- FERC is reviewing license applications totaling 2.7 GW for new pumped storage projects in Nevada, California, Kentucky, and Wyoming, while considering preliminary permit applications totaling 304.2 GW — including 300 GW in western Virginia alone.
Why it matters: The Lewis Ridge project would be the first utility-scale pumped storage facility built in the U.S. in about 30 years, and its $4.9 million/MW price tag raises a viability question that Jefferies analysts tied directly to whether a hyperscaler data center customer signs on — meaning Kentucky ratepayers and PPL shareholders carry real execution risk before a single turbine is turned. The 304.2 GW of preliminary permits sitting at FERC shows this is one of many such projects jockeying for the same AI-driven load growth that Rye's CEO identified as the core market driver.
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