A U.S. Department of Energy report found that data centers, the engines powering artificial intelligence projects, could consume between 6.7 to 12% of total U.S. electricity by 2028.
One concern surrounding the energy-hungry centers is the potential for higher energy bills for ratepayers, who could also end up on the hook for new power generation facilities that wind up not being needed should the projects fall through.
House Bill 593 would allow data centers only three ways to build in Kentucky: They could provide their own generation, buy electricity on the national open market, or "the third way, if we have to increase generation, if we have to increase transmission, then the data center should pay for all those expenses upfront."
Rep. Josh Bray, the bill sponsor, also wants to attach a $75,000 application fee for companies seeking to build the centers in the hopes that it will separate the more serious proposals from those more likely to be scrapped, while also helping utilities cover the costs of pre-planning.
"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," Rep. William Lawrence said. "We're setting the parameters, we're setting the guardrails, as we should."
But advocacy organizations note that costs come in more forms than financial and they're urging lawmakers to look more holistically at the impact of the centers.
Rep. Nima Kulkarni hinted at that concern.
"I want to also make sure we address environmental impacts of these data centers, so there's going to be a lot of areas where we need to regulate them, but I appreciate you taking the first step," she told the sponsor.
Kentucky Utilities and Louisville Gas & Electric told lawmakers in 2025 they had 20 data center projects in the pipeline.
The bill is on its way to the full House.