PPL Corporation and Blackstone Infrastructure have announced the creation of a joint venture designed to develop, own, and operate new combined-cycle gas power plants to meet the growing electricity needs of data centers in Pennsylvania. According to company executives, these facilities aim to ensure a stable energy supply through long-term power agreements, amid rapid digital expansion and rising demand on the local grid, Bloomberg reported on July 15.
A new model to secure data center supply
The partnership specifically targets the region above the Marcellus and Utica shale basins, with the intention to leverage existing gas pipeline capacities. No contracts have yet been signed with leading cloud and artificial intelligence companies, but the joint venture is in active talks with landowners, pipeline operators and turbine manufacturers. Several land parcels have already been secured for this development, the companies stated.
PPL Corporation will hold 51% of the joint venture shares, with Blackstone Infrastructure owning the remaining 49%. Expenses and revenues will be shared according to each partner’s respective stake. PPL notes that its regulated subsidiaries, including PPL Electric Utilities, are not involved in this partnership.
A response to record regional demand growth
Potential demand identified for data center projects within the PPL Electric Utilities service territory exceeds 60 gigawatts (GW), with more than 13 GW in advanced planning stages. If all these projects are realised, PPL estimates the region will face a 6 GW capacity shortfall within five to six years, requiring an estimated $15bn investment based on combined-cycle plant costs.
The joint venture comes as PJM Interconnection, the regional grid operator, warns of a potential capacity deficit as early as the 2026-27 delivery year. Strong demand growth, particularly for data centers, combined with the progressive retirement of dispatchable generation, has left the region with unprecedented infrastructure needs.
Market adaptation and legislative changes
Implementation of these power stations depends on the signing of long-term power agreements with hyperscale data centre operators. PPL Corporation notes that this project alone will not resolve all the resource adequacy needs identified in the PJM region. The company supports the adoption of current legislative proposals before the Pennsylvania legislature that would allow incumbent utilities to invest in generation again.
“Blackstone Infrastructure has a solid track record in developing long-term partnerships and investing in critical infrastructure,” said Sebastien Sherman, Senior Managing Director at Blackstone Infrastructure, as quoted by Bloomberg on July 15.
