The details of Gov. Beshear's data center executive order

Kentucky Governor Andy Beshear's executive order on data centers, signed on August 6th, mandates that the state will not permit any data centers that negatively impact air or water quality. The order directs the Energy and Environment Cabinet and the Public Service Commission to adopt a more stringent approach to these projects. Governor Beshear was questioned by WHAS11's Travis Brees regarding the order's enforceability and timeline.

Byron Gary with the Kentucky Resources Council acknowledged the governor's stance on potential negative environmental effects but expressed uncertainty about how the agencies would implement the order given existing Kentucky laws. Gary noted that state law prevents the Energy and Environment Cabinet from imposing regulations stricter than federal Clean Air Act and EPA standards, with Louisville being a rare exception for more stringent local rules. He therefore does not anticipate the administration heavily vetting data centers solely on environmental grounds.

The executive order also requires data center developers to submit an initial energy plan detailing their power sources. Governor Beshear indicated that the first such plan was expected last week, with positive feedback from most companies looking to build in Kentucky. Furthermore, the governor expressed support for reducing or eliminating data center tax breaks, arguing that these wealthy companies can afford construction without state incentives. The Kentucky legislature had passed a tax exemption for data center equipment in 2024, but no company has utilized it yet, though many projects in the pipeline are expected to do so soon.