Beshear executive order establishes ratepayer cost, environmental protections on data centers
Kentucky Governor Andy Beshear issued an executive order imposing new requirements on data center developers statewide. The order aims to protect residential ratepayers from increased energy costs and mandates adherence to environmental regulations and public engagement. A state senator criticized the move as "political theater" and advocated for a legislative approach.
Kentucky Governor Andy Beshear signed an executive order on August 6, 2023, establishing new requirements for data center developers operating within the state. The order mandates that developers submit an energy plan to the Kentucky Energy and Environment Cabinet, demonstrating how projects will avoid imposing additional energy costs on residential ratepayers. It explicitly states that the Kentucky Public Service Commission cannot permit utility rate increases for other ratepayers to cover costs incurred by data center development or operation.
Further provisions of the executive order direct the Energy and Environment Cabinet to deny permitting applications for any data center project that would negatively impact Kentucky's air quality, water use, water quality, water supply, federal jurisdictional wetlands, or other natural resources. Developers are also required to comply with all applicable environmental laws, engage transparently with local communities, and pay their fair share of state and local taxes. Governor Beshear emphasized that the order aims to ensure data centers are "good neighbors" and clarified that it does not override local community decisions on project approvals.
However, Senate President Robert Stivers, R-Manchester, criticized the executive order as "political theater," arguing that a lasting framework for data centers should be established through the legislative process with comprehensive input from all stakeholders. Stivers noted the failure of previous legislation, including House Bill 544, which sought to prevent ratepayers from bearing data center costs, in the 2026 session.