The mayor of Russell learned in June that a Barcelona company wanted to build a two-gigawatt data center on the old AK Steel site in his town. He learned it from a consultant’s email, and the consultant’s first concern was that the moratorium Russell had just passed might get in the way. That is how an $8-$12 billion-dollar project that would draw more than a tenth of Kentucky’s summer electricity announced itself, as the Kentucky Lantern reported in July.

Russell is not alone. Kentucky utilities told regulators in May that as many as 30 data centers were under discussion in the state, the Lantern found. TeraWulf is building on the industrial park Greenup shares with Boyd County and at the idled aluminum smelter in Hancock County. Pikeville has signed a memorandum with a Lexington developer, WYMT reported in June. The response has been the only one the law allows a county. Bell County, Cave City and Russell passed moratoriums, a Burgin council member walked out on September 9 to deny a quorum, and the day before, the Woodford County Fiscal Court had voted unanimously to ban data centers outright, the first county in the state to do so, with no project even proposed.

The General Assembly gave the industry a sales-tax exemption and then let bills from both parties on water use, siting and ratepayer exposure die on the last day of the session. Gov. Andy Beshear filled the gap in August an executive order which requires developers to show the state they will not raise other customers’ bills. It is the strongest statement any Kentucky official has made, but it is an order rather than a statute, and it does not say what happens to a developer who ignores it.

So, the counties are largely on their own, and they should know what they are getting. A hyperscale data center consumes electricity on the scale of a power plant and, once built, needs surprisingly few people. The Russell project promises 200 permanent jobs on $12 billion dollars of investment. Pikeville’s first phase is 40. In Mason County, W.Va., the Monarch campus will employ 645 people on a $69 billion first phase, roughly one job for every hundred million dollars, according to figures from Gov. Patrick Morrisey’s office reported by the Charleston Gazette-Mail. Neighbors whose yards flooded during site grading have been selling their homes, West Virginia Public Broadcasting reported in August.

What a data center does produce is property tax. Loudoun County, Va., collected $875 million from data centers last year and runs a third of its government on them. For an Eastern Kentucky county that has watched its coal severance money vanish, that is the first serious new tax base anyone has offered in a generation. It is worth having, and worth pricing correctly. The coalfields once gave away their minerals for a dollar an acre to people who knew exactly what they were worth.

Good advice

Here is what a county or city can put on the table before it signs, my research shows.

Buy time first. A moratorium is not obstruction. It is the only tool the legislature left local governments, and it can be used to write a zoning ordinance that covers setbacks, noise, water, generators and stormwater. Wythe County, Va., learned what happens without one when its board chairman conceded in December that a data center could become anyone’s next-door neighbor without a hearing, Cardinal News reported. Nine months later the county still has no zoning and the project is proceeding.

No code names. A project that will use public water, public roads and a public tax exemption should not be negotiated under a nondisclosure agreement. The developer, not its consultant, should appear by name before the fiscal court or council votes.

Get the numbers from someone other than the developer. Hire an independent analyst and make the developer pay for it. The Kentucky Center for Economic Policy has already warned that developers may claim the manufacturing and industrial-processing tax breaks in state law, which would shrink the windfall school districts are counting on, the Lantern reported Sept. 2.

Turn promises into obligations. Pikeville’s instinct, to demand enforceable commitments on jobs and wages before signing, should be the state standard. If the jobs do not appear, the tax abatement should disappear with them. Add local hiring and an apprenticeship line at the community college, because the durable jobs are electricians, pipefitters and plant operators. And make every obligation bind whoever owns the property next. The company making promises today may sell the campus in 10 years to one that never made them.

Put the electric bill in a contract. Kentucky is not starting from zero here. On August 21 the Public Service Commission approved the contract between Big Rivers Electric and TeraWulf for the Hancock County project after finding that it made the data center bear the cost of serving its own load and protected existing customers, the Lantern reported. Every project should be subject to a commission-approved tariff or contract of that kind, and citizens should follow the PSC docket in Frankfort as closely as the courthouse agenda, because that is where the money is decided.

Water on the record. Russell’s developer says it will use 55 million gallons a year from a system that produces about 500 million, according to the company’s answers to the city. Put it in the agreement, with a cap, monitoring and priority for households in a drought.

Plan for the end at the beginning. Senate Bill 319, introduced in March and never heard in committee, would have required a decommissioning plan and a surety bond for data centers built on farmland. A county can require the same on its own, so taxpayers are not left with an empty shell and a field of dead generators if the project fails. Make the developer pay for the road damage its construction causes and for the fire equipment and training that a campus full of generators, fuel and battery storage will require. And require a short public report every year on actual jobs, taxes paid, and power and water used, so the community can see whether the bargain it was promised is the one it got.

One demand belongs in Frankfort. The coal severance tax was the mountains’ one belated victory over an extractive economy, and even then most of the money went into the state general fund, with only a share sent back to the counties that had been mined. Kentucky should do better with data centers. A per-megawatt-hour levy on their power, paid entirely to the county that hosts them, would put the machines to work paying for the roads, schools and water systems they strain. If the industry says it will go elsewhere, ask where. It is looking at Kentucky because Northern Virginia and the other older data center regions are running out of power and patience.

The data centers can be good for Kentucky if the citizens want them. But they should be negotiated, not surrendered, by communities that know what they own. The mountains have said yes the other way for 150 years, and every hollow can show you what it bought.