A $14 billion data center looms in a Kentucky county of 9,000 people
A $14 billion data center project by Tera Wolfe is coming to Hancock County, Kentucky, sparking controversy over its high electricity demands and competition with the manufacturing sector. Kentucky leaders are seeking to both incentivize and regulate new data center development, having issued new state tax incentive criteria for these projects.
A significant data center project, estimated at $14 billion, is planned for Hancock County, Kentucky, by the company Tera Wolfe. Construction is anticipated to begin this year, with the data center expected to be operational by 2027. The facility will be built on the former site of a Century Aluminum Smelter, which closed in 2022 due to high electricity costs, leading to the loss of 600 jobs.
The project has ignited controversy as it highlights a broader trend in Kentucky: energy-intensive data centers are competing with labor-intensive manufacturing for electricity. Data centers typically employ fewer people but are willing to pay higher electricity prices, potentially displacing price-sensitive manufacturers. Tera Wolfe projects significant economic benefits, including construction and permanent jobs, as well as substantial tax contributions, such as $14.5 million annually in state sales tax and $7 million in annual school tax for Hancock County, amounting to over $4,000 per student.
Kentucky's state government is navigating the complexities of promoting and controlling data center growth. The Cabinet for Economic Development has introduced new criteria for data center projects to qualify for state tax incentives. These requirements include a letter of support from local officials, a clear plan detailing community benefits, and utility analyses confirming sufficient electrical capacity. The video concludes by inviting viewer input on the need for further data center legislation.