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Kentucky issues executive order setting energy, environmental and community conditions for data centers
Summary
Gov. Andy Beshear signed an executive order requiring data center developers to submit energy plans, demonstrate they won’t raise residents’ electric bills, comply with environmental permitting, pay state/local/school taxes and engage transparently with host communities.
Kentucky Gov. Andy Beshear announced an executive order aimed at protecting families and the environment from potential harms posed by large data centers, saying the measure establishes a statewide baseline for any company seeking to locate in the commonwealth. "I'm announcing an executive order that I'm signing to protect against any harmful impacts from potential data centers," Beshear said during a Team Kentucky update in Frankfort.
The order requires developers to submit an initial energy plan to the Energy and Environment Cabinet that explains how a project will meet its power needs “without imposing any additional costs on our families.” Beshear said he is "ordering the Public Service Commission to prohibit utilities from increasing rates to recover costs caused by the development or operations of a data center" and instructed regulators to deny applications that would shift those costs to ratepayers. He also directed the Energy and Environment Cabinet to deny permitting applications where a data center would negatively affect air quality, water use or supply, federal-jurisdictional wetlands, or other natural resources.
John Lyons, introduced by the governor as the Energy and Environment Cabinet secretary, said the cabinet is tracking more than 30 local ordinances and moratoriums and emphasized the cabinet’s statutory duty to enforce air- and water-quality standards. Angie Hatten, introduced as chair of the Public Service Commission, said the framework provides guidance Kentucky can use to avoid problems other states have experienced. Beshear emphasized that the order does not eliminate local decision-making: "That is up to the local community," he said, urging developers to be transparent, pay local and school taxes and engage meaningfully with residents.
The administration said the directive is intended to be a first step: utilities and regulators will consider permit applications and energy plans as they arrive. Beshear said projects that cannot meet the order’s minimum standards should not be built in Kentucky. The PSC and the Energy and Environment Cabinet are the next bodies expected to implement the order's directives.
