Governor Andy Beshear Signs Order Regulating Kentucky Data Centers

Governor Andy Beshear signed an executive order on Thursday to regulate the expansion of data centers across Kentucky. The order requires developers to submit detailed energy plans to the Energy and Environment Cabinet to ensure that the high power demands of these facilities do not lead to electric rate increases for residents and businesses.

Under the new rules, the Public Service Commission must block utility companies from raising rates to recover costs associated with data center development. The Energy and Environment Cabinet is further mandated to deny permits for any projects that threaten water supplies, air quality, or other natural resources. Additionally, the order requires developers to maintain transparency with community leaders and pay all applicable state, local, and school taxes.

While Panattoni Data Centers expressed support for the framework, the order faced immediate criticism from state lawmakers and residents in Mercer County. House Speaker David Osborne and Representative Josh Bray argued that the order lacks the enforcement mechanisms found in House Bill 593, a proposal approved by the House earlier this year. Representative Bray indicated that while the governor's attempt is appreciated, significant work remains, and he pledged to file a more comprehensive bill during the next legislative session.