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Mention data centers and you’re likely concerned about increasing electric bills, water consumption, noise, and whether these facilities truly benefit the communities where they’re built.
Those are legitimate questions and the same ones I would ask if a major project were proposed in my own community. Kentuckians deserve honest answers whenever a significant economic development opportunity comes to their hometown.
The good news is that today’s data centers, and Kentucky’s approach to attracting them, look very different from the dramatic, worst-case scenarios often highlighted in the national press.
The concern I hear most often is, will local families and businesses end up paying for the infrastructure needed to support these facilities?
The answer should always be no. Kentucky supports a full-cost allocation approach, sometimes referred to as a tariff. If a developer requires new transmission lines, substations or additional generating capacity to serve its facility, those costs should be paid by the developer, not existing ratepayers.
Private investment should not become a public expense. If a company benefits from a project, it should pay the costs associated with bringing that project online, not Kentucky families and small businesses. If a company creates the demand, the company should pay the bill.
Another common concern is water usage. Many people envision enormous amounts of water being consumed every day. Modern facilities, however, increasingly rely on closed-loop cooling systems that are filled initially and then reused. Water is only replenished periodically, often every several months, and can be scheduled during off-peak demand periods. That is a very different picture from the one many people imagine.
Noise is another issue frequently raised. It’s important not to confuse artificial intelligence data centers with cryptocurrency mining operations. They are fundamentally different. Modern data centers operate quietly, often generating less noise than the rooftop heating and cooling equipment found on a typical grocery store or commercial building. They are designed as modern, well-maintained facilities that fit comfortably within industrial and commercial settings.
None of this means every proposed project is appropriate for every location. Local officials and residents should continue asking questions, demanding transparency, and making sure any project is a good fit before the first shovel touches the dirt.
Recently, the Energy Planning and Inventory Commission released a report showing Kentucky is well-positioned to compete for these investments while protecting existing ratepayers and maintaining a reliable electric grid.
The economic impact begins long before the facility opens. Construction alone creates hundreds of skilled jobs over multiple years, generating work for Kentucky contractors, electricians, equipment operators, suppliers, restaurants, hotels and countless local businesses that support those workers.
A typical large-scale data center creates more than 100 permanent, well-paying jobs, many with salaries exceeding $100,000 annually. Beyond engineers and technical professionals, these facilities require highly trained, around-the-clock security personnel, creating excellent second-career opportunities for veterans and retired law enforcement officers.
Then there is the long-term benefit to local governments. Once operational, these facilities significantly increase local property tax revenues. In communities across the country, school districts have seen property tax receipts increase by 25 to 40 percent following major data center investments. Those revenues don’t just support education. They strengthen funding for fire departments, libraries, health departments, soil conservation districts, and city and county governments, all without raising a single local tax rate.
We don’t have to choose between protecting our communities and creating jobs. Good policy does both. That’s the standard Kentuckians should expect, and it’s the standard we should continue to demand.
Economic development should never come at the expense of the people who already live here. That’s why Kentucky’s approach matters. When developers pay the full cost of the infrastructure they require, modern technology minimizes environmental impacts, and communities receive lasting economic benefits. We can welcome investment without asking our citizens to shoulder the burden.
That isn’t choosing between economic growth and protecting Kentucky communities. It’s proving Kentucky can and should do both. If done right, communities will see a massive economic windfall.
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Please visit Legislature.ky.gov for information on Senate Majority Caucus members, legislative committees, and additional resources, including legislation enacted during the 2026 Legislative Session.
Lawmakers returned to Frankfort in June to start the 2026 Interim. During this period, committees will meet to study policy issues, review implementation of recently passed legislation, and begin evaluating proposals for the 2027 30-day session, which begins Tuesday, Jan. 5, 2027.
Live coverage of interim legislative meetings is available atKET.org/legislature and on the LRC YouTube channel.
You can follow the Kentucky Senate Majority Caucus on X, Facebook,Instagram, and BlueSky. For additional member information and press releases, visit KYSenateRepublicans.com.
Sen. Robert Stivers, R-Manchester, represents the 25th Senate District, including Clay, Jackson, Knox, McCreary, Owsley, and Whitley Counties. Stivers has served as Kentucky Senate president for over a decade. He first assumed the position in 2013, succeeding former Senate President David Williams. As the Senate President, he is co-chair of the Legislative Research Commission. Stivers is also a member of the Interim Joint Committee on Judiciary.
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