As tech companies plan to bring more data centers to Kentucky, legislation has been introduced that would ensure Kentuckians would not be subsidizing the utility costs.
The House Economic Development and Workforce Investment Committee heard from Rep. Josh Bray, R-Mount Vernon, on Thursday. He is the primary sponsor of House Bill 593, which addresses the issue.
Bray said he’s spent the last two years on the Artificial Intelligence Task Force learning about the utility needs of data centers.
“What this bill does is make sure Kentucky handles data centers the right way, so that we protect our ratepayers, and we take advantage of kind of a unique opportunity and protect our future economic interest going forward,” Bray said.
If a tech company wants to bring a data center to Kentucky, HB 593 would require the company to do one of three things, Bray told the committee.
First, a company could choose to provide its own electric generation for a data center and donate any excess back to the local utility. The second option is the company could enter into a power purchase agreement, and the third option would be purchasing the electricity on the national open market.
The legislation would also require a minimum, non-refundable $75,000 application fee.
“If we have to increase generation, if we have to increase transmission, then the data center should pay for all of those expenses,” Bray said.
The legislation also includes a provision addressing water, gas and wastewater costs, he noted, and would apply to both municipal and private utility companies.
Rep. William Lawrence, R-Maysville, stated HB 593 is a “due diligence” bill that addresses one of the biggest concerns many constituents have about data centers in Kentucky. “I feel like we are always on the backside of fixing problems here in Frankfort, and this is a bill that gets ahead of the game. We’re setting the parameters. We’re making the guardrails, which we should as the people who set the laws for the state.”
Bray added, he believes the bill is “pretty clear” that ratepayers cannot subsidize data centers.
The committee approved the bill unanimously, sending it to the House floor.
House Majority Caucus Chair Suzanne Miles, R-Owensboro, (left) confers with Rep. Josh Bray, R-Mount Vernon, on the House floor Friday, February 6. (LRC photo)
