Kentucky Gov. Andy Beshear issued an executive order Aug. 6 establishing requirements for data center developers, including protections for utility ratepayers and the environment, payment of local and school taxes and meaningful engagement with communities.
The order comes as data centers have become a growing topic of discussion across Kentucky, with some cities and counties considering or enacting moratoriums on their construction and other communities facing legal challenges related to proposed developments on farmland.
“Data center companies looking to do business in Kentucky, at a minimum, must demonstrate they will be good neighbors by investing responsibly, operating transparently, and working in partnership with our people and communities to make certain these projects deliver lasting benefits for Kentucky’s working families,” Beshear said in the order.
Under the order, data center developers must submit an energy plan to the Energy and Environment Cabinet demonstrating how they will meet their energy needs without imposing additional costs on residential ratepayers.
The Public Service Commission is directed not to allow utilities to increase rates paid by other customers to recover costs associated with the development or operation of a data center.
The order also directs the Energy and Environment Cabinet to deny permits for data centers that would negatively affect Kentucky’s air quality, water use, water quality, water supply, federally protected wetlands or other natural resources. Developers must demonstrate compliance with applicable environmental laws and public engagement requirements.
Data center developers must also commit to paying their full and fair share of state and local taxes, including taxes that support local communities and schools.
The third requirement calls for developers to establish a meaningful relationship with the communities where they propose to locate. Developers must engage in public discussions with local leaders and residents and address community questions transparently, including questions about local employment opportunities.
The order does not affect decisions made by local governments regarding the operation of data centers within their jurisdictions.
Beshear said his office will monitor data center projects and hold developers accountable for commitments made to communities and Kentucky residents.
