PPL Corp sees data center demand jump 40% in Pennsylvania over three-month period

By Laila Kearney and Pranav Mathur

Nov 5 (Reuters) - U.S. electric utility PPL Corp PPL.N signed agreements to connect 20.5 gigawatts of new data center customers in Pennsylvania to its system by the end of the third financial quarter, a 40% increase from the previous quarter, executives with the company said on Wednesday.

The proliferation of Big Tech's giant data centers is propelling U.S. electricity consumption to record highs, and heaping demand on the country's electric utilities for grid connections and new power supply.

By September 30, which marks the end of the third quarter, PPL had entered into energy service agreements or letters of authority with data center customers totaling 20.5 gigawatts of demand. Twenty gigawatts is enough to power nearly all of the homes in the state of Pennsylvania three times over.

Those agreements require financial commitments from data center developers and end users and increase the certainty that the sites will eventually connect, PPL executives told analysts on a conference call after releasing third-quarter results.

Other potential data center customers who do not have signed agreements, and who represent about 70 gigawatts of power, are also seeking to connect to PPL, the company said.

PPL generates and delivers electricity to nearly 3.5 million homes, businesses and industrial customers across Pennsylvania, Kentucky and Rhode Island.

Earlier on Wednesday, PPL beat third-quarter adjusted profit estimates, helped by higher sales volume on the back of warmer weather conditions in its service areas.

Utilities are also increasing capital spending to upgrade grid infrastructure in response to rising power demand, as they field massive requests for new power capacity from data centers, which are the server warehouses that support technologies like artificial intelligence and cloud computing.

In October, PPL received approval from the Kentucky Public Service Commission to construct two new 645-megawatt natural gas combined-cycle units, which are scheduled for operation from 2030 and 2031, respectively.

PPL's quarterly operating revenue rose to $2.24 billion from $2.07 billion a year earlier.

The company narrowed its full-year earnings forecast range to $1.78-$1.84 per share from its prior range of $1.75-$1.87 - the midpoint remains unchanged.

The Allentown, Pennsylvania-based company posted an adjusted profit of 48 cents per share in the third quarter, compared with analysts' estimates of 46 cents, according to data compiled by LSEG.