Gov. Andy Beshear (D-KY) has become the latest governor to crack down on data centers, signing an executive order on Thursday to curb the impact artificial intelligence infrastructure giants have on local ratepayers.
Data centers, which require a significant amount of energy and water to power and cool, have become a central part of the 2026 political playbook as state legislatures, governors, and political candidates respond to constituents’ concerns over how the facilities could reportedly jack up their electric and water bills. Beshear announced his administration’s action aimed at safeguarding Kentuckians’ utility prices from rate increases on Thursday afternoon.
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“This establishes the framework to ensure that data center companies looking to do business in Kentucky, which will ultimately be a very local decision on whether to welcome them, but that any company looking at Kentucky, at minimum, is required to demonstrate they will be good neighbors,” Beshear said.
The executive order will require data center companies looking to build facilities in Kentucky to submit a plan to the state Energy and Environment Cabinet detailing how they will cover the entirety of their own energy costs in the present and future. The order also aims to crack down on utility companies that raise rates for all local residents to compensate for costly data centers in the area by ordering the state’s Public Service Commission to bar such practices.
“They will be held to the same high standards we demand of any potential partner, and they must prove that their investment will deliver lasting benefits to Kentucky’s working families,” Beshear said.
Beshear also included provisions to require AI data center companies to cooperate with the local community and government, demonstrate compliance with state and local environmental regulations, and pay their full share of local taxes without any breaks. Tax exemptions were used by several states, including Virginia, to encourage data center development, particularly on the brink of the AI data center boom about a decade ago.
Beshear follows other U.S. governors in cracking down on the possibly harmful effects of data centers. The trend crosses party lines, with Govs. Greg Abbott (R-TX) and Kathy Hochul (D-NY) each signing data center moratoriums, barring data center construction for certain periods of time in response to backlash from local communities on the infrastructure.
Many Republican governors have signed onto President Donald Trump‘s ratepayer protection pledge, which is designed to ensure that data centers shoulder their own energy costs without impacting residents.
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Polling about data centers generally trends toward negative viewpoints across both political parties, though it skews more negative among Democrats. According to a July Politico-Public First poll, 41% of survey respondents opposed the idea of building a data center within 3 miles of their home, while 24% supported the idea.
Despite concerns about their reported possible effect on ratepayers, data centers can also provide more local employment opportunities and grow local commercial tax bases, all while developing the domestic AI industry as the United States races to bolster its own against China’s.
