Democratic Kentucky Gov. Andy Beshear says he’s signing an executive order to protect Kentuckians “against any harmful impacts from potential data centers,” directing the state utility regulator and environmental protection officials to take specific actions on data centers.
During a Thursday press conference, Beshear said economic wins “can never come at the cost of the health and safety of our families or the communities we call home.” He stood next to Angie Hatton, the chair of state utility regulator Kentucky Public Service Commission, and John Lyons, the secretary of the Kentucky Energy and Environment Cabinet.
“Any company looking at Kentucky, at minimum, is required to demonstrate they will be good neighbors. They must invest responsibly, operate transparently, and work in partnership with our people and our communities,” Beshear said. “They will be held to the same high standards we demand of any potential partner, and they must prove that their investment will deliver lasting benefits to Kentucky’s working families.”
Beshear, responding to a question from a reporter, said he was issuing the executive order now because “there’s a lot of speculation out there” with some companies talking with county fiscal courts.
“The executive order is going to set a baseline. If you cannot meet it, you’re not coming to Kentucky,” Beshear said.
Beshear said his executive order would direct the Energy and Environment Cabinet, which issues permits to industrial sites that set limits on air and water pollution, to deny permits to any data center site that would negatively impact air quality; water quality, usage and supply; federally protected wetlands and “natural resources”. He said data center developers would have to submit an “initial energy plan” to the cabinet explaining how the developer would protect businesses and residents from rising utility bills while not “imposing any additional costs on our families.”
The Democrat said the order would also direct the Kentucky Public Service Commission to deny requests from utilities that would increase rates “to recover costs caused by the development or operations of a data center.” The order also states that data centers must commit to “paying their full and fair share” of local and state taxes.
“The governor’s executive order and his directive are clear. The cabinet simply will not permit, not issue a permit that’s not protective of human health, our natural resources, and the environment,” said Lyons, the Energy and Environment Cabinet secretary.
Hatton, the chair of the PSC, said it was important for the state to learn lessons from other states “that maybe have not implemented data centers in the most effective way to protect ratepayers.”
“I’m grateful that we have guidance like this that will provide a framework that allows us, if we allow data centers to develop in our state, that they’re done in a thoughtful and deliberate way, and in a way that allows us to protect Kentucky families and ratepayers of every class,” Hatton said.
On the final day of this year’s legislative session, a bill supported by Rep. Josh Bray, R-Mount Vernon, died that would have required utilities to ensure they prevent “the subsidization of data center customers by non-data center customers through rates or by any other means.” At the time, Bray said the state Senate had stood in the way of the bill passing.
In a text message, Bray told the Lantern that he appreciated the governor’s attempt to “ensure Kentuckians’ interests are protected in regard to data centers, there is a lot of work left to do.”
He said his bill “was much more thorough and provided far better oversight”, and he planned to have another bill ready to file the first week of next year’s legislative session.
“I remain committed to working on this issue to make sure Kentucky leads the nation in smart energy and economic development policies,” Bray said.
In a statement, Kentucky Senate President Robert Stivers, R-Manchester, said the governor’s executive order echoes what he already wrote about in a recent column, arguing that data center developers should bear the cost of new infrastructure.
“If we’re going to establish a lasting framework for data centers, it should be done the right way, through the legislative process, with input from all involved parties. That’s how you produce sound policy that protects ratepayers, respects communities and provides certainty for businesses investing in Kentucky,” Stivers said.
He said unlike the executive order “issued for headlines”, the legislature was working with Kentucky’s congressional delegation to make sure state and federal efforts align.
“While the governor has finally embraced the right premise, this is more political theater than public policy. The governor should spend more time in Kentucky than in South Carolina or New Hampshire where he’s obviously been more focused on improving his feeble presidential ambitions,” Stivers said.
This story has been updated.
