Some Kentucky counties and cities are suspending data center operations

Daviess County Judge-Executive Charlie Castlen said he hadn’t heard the term “hyperscale” before. That was until news broke that a massive hyperscale data center was being built planned on the site of a disused aluminum smelter in neighboring Hancock County.

“There is a lot to learn,” Castlen told The Lantern in a recent telephone interview. “People are very passionate about this, saying they don’t have to be part of our community.”

Residents’ fierce opposition to data centers in his county brought the local government to task enact a moratorium preventing the construction of data centers at the end of May for the next 12 months. This opposition includes ongoing speculation by residents and the county commissioner regarding local land deals associated with a company dealing with investments in the field of “energy infrastructure and data centers”.

Daviess County, home to more than 100,000 residents and the western Kentucky city of Owensboro, is one of a growing number of cities and counties across Kentucky that are considering enacting such moratoriums – essentially a short-lived ban – or implementing other zoning regulations on data center construction. The moratoriums have been criticized by the data industry, including tech companies, as anti-business pump billions of dollars into the construction of centers.

Dan Diorio, vice president of state policy for the industry group Data Center Coalition, said in an emailed statement that moratoriums on local data centers “send a signal that the area is closed to business, both for data centers and other significant economic development projects.”

The trend toward local moratoriums follows protests by Kentuckians in some communities where relocating a enormous data center to the community is being speculated or actively proposed. These residents have grave concerns about hyperscale data centers and their solutions potential noise pollution, significant water consumption AND huge amounts of electricity consumption.

There are also concerns about transparency. In Boyd County, locals packed the convention center criticizes local officials to sign non-disclosure agreements, or NDAs, with a data center developer who wants to build a massive facility in an industrial park.

Owensboro resident Bryan Smeathers, 69, who attended the Daviess County meeting that passed the moratorium, is completely opposed to enormous data centers. He argued that a one-year moratorium would not be enough to determine the health and environmental impacts of such operations.

“There is nothing positive for the community or the future except property tax revenue,” Smeathers said.

There have been many smaller data centers in Kentucky that support a variety of online services, including digital cloud storage, but with the surge in artificial intelligence investment, massive data centers known as “hyperscale” across the country, which can consume the equivalent of the electricity of an entire power plant. Kentucky Power Utilities as many as 30 data centers reported they are looking for a location in the state.

Castlen told the Lantern that the moratorium would give time to investigate residents’ concerns about the impact of such operations, but he didn’t believe the county could prevent data centers from moving in.

“I think we can establish rules to protect our citizens and our community, but I don’t think we can completely ban businesses,” Castlen said. “It is our responsibility to do our homework.”

Local governments are stepping in

Kentucky’s Republican-controlled Legislature did not pass any legislation this year to address the environmental and financial impacts of hyperscale data centers coming to the state.

One Republican-sponsored bill that would require utilities to ensure that infrastructure costs serving enormous data center customers are not borne by other ratepayers he died on the last day of the session. Many utilities argue that their own regulations and rates already protect electricity ratepayers.

Republican state senators last week he said they would do research what data center-specific regulations are needed. Lawmakers won’t be able to pass the bill until the Legislature reconvenes for a regular session next year unless Democratic Gov. Andy Beshear calls a special session.

Meanwhile, local governments enormous and compact have tried to improve their own data center regulations and moratoriums after hearing voters’ concerns.

The city council of Cave City, Kentucky, a community of approximately 2,400 people located near Mammoth Cave National Park, a one-year moratorium was passed last month after local leaders said they were approached by a data center developer. It is the town of Murray in western Kentucky improving zoning regulations for data centers, even though there were no data center proposals.

Allen County Republican Judge-Executive Dennis Harper, who represents the community of about 21,000 along the Tennessee border, told the Lantern that his government recently enacted a 24-month moratorium on data center construction after seeing leaders in nearby Simpson County suffer “headaches.” with the proposal of a hyperscale data center.

“We felt like this would hopefully protect us until we get everything in order and see where we want them if someone decides to locate here,” Harper said. “I wouldn’t want something like that next to me. It changes my lifestyle, it causes a lot of noise pollution.”

But in Kentucky’s largest city, Louisville, the planning and zoning commission met on June 2 I voted for the table a six-month moratorium proposed by City Council member Jenniffer Chappell, who stated at the meeting that she “doesn’t want Louisville to be a guinea pig for these data centers.”

Andrew Owen, the committee’s chairman, said at the June meeting that he viewed the moratorium as an “absolute last resort” and argued that the committee could hold off on the moratorium until it was needed.

Louisville Planning Commission in March approved a 1.6 million square foot data center in West Louisville despite local opposition.

So does the Bowling Green City Council a moratorium on data centers was recently voted down; The mayor argued that the city should not close off potential economic opportunities. The second largest city, Lexington, Kentucky, has local government taking into account the decision on development conditions regarding data center addresses after a data center developer purchased a $29 million facility in the city.

I’m catching up

Randy Strobo, a Louisville attorney who focuses on environmental and energy issues, told Lantern that moratoriums give local governments more time to “catch up” with the “huge, new, intensive land use” of hyperscale data centers. Strobo said data center developers don’t like such moratoriums because they hold up projects.

He said both state and local governments “dropped the ball” by not being crystal clear with the public as they learned more about data center development.

“It reflects that people are kind of panicking and demanding that their local governments take action immediately because we are so far behind,” Strobo said. “We should have talked about this several years ago, not just today.”

Chuck Charles, mayor of Ashland in Boyd County, has noticed local opposition to the county’s proposed hyperscale data center and has tried to remain neutral on the issue. His city adopted a six-month moratorium on data center applications earlier this year to explore this issue in more detail.

But he wonders what the influx of data centers could mean for his region, a place where industrial plants and jobs such as AK Steel have sprung up finally leave.

“It’s over now and we have to deal with all the repercussions,” Charles said. “Will it be the same with data centers? I don’t know.”