Kentucky governor signs executive order on data centers
Kentucky Governor Andy Beshear signed an executive order requiring data center developers to prove their projects will not cause utility rate hikes for customers. The order also mandates environmental protections and fair tax contributions from data centers. Republicans in the General Assembly acknowledged the premise but criticized the use of an executive order instead of legislative process.
Kentucky Governor Andy Beshear issued a new executive order aimed at regulating data center developments within the state. The order mandates that data center developers submit plans to the state Energy and Environment Cabinet demonstrating how their projects will not lead to increased energy rates for Kentucky utility customers. Furthermore, it prohibits utilities from unilaterally raising rates.
Governor Beshear emphasized that the order establishes a baseline, stating that any development unable to meet these requirements would not be permitted in Kentucky. The executive order also includes provisions for environmental protection, requiring data centers to meet state-set metrics for air and water quality to prevent pollution. Additionally, data centers will be required to pay their "fair share" of state, local, and school taxes. Beshear clarified that the order does not override local government authority to approve or deny data center developments but sets a statewide minimum standard.
The governor's action received a mixed response from Republicans in the General Assembly. Senate President Robert Stivers, R-Manchester, supported the underlying principle but dismissed the executive order as "more political theater than public policy." Stivers advocated for a legislative process involving all stakeholders to create a more enduring framework for data centers that protects ratepayers, respects communities, and provides certainty for businesses.