KY utility regulators set rates for power co-op’s future data center customers
Data centers hoping to become customers of the East Kentucky Power Cooperative will have different electricity rates than residential consumers, according to the state’s utility regulatory agency.
The Public Service Commission modified the co-op’s request for setting rates in approving a special tariff system outlining how the state’s prospective data centers ought to pay for electricity.
According to the Oct. 30 order, owners and operators of eligible data centers must agree to special contracts with the co-op for service, which would require additional approval from the commission. Those contracts would outline the terms for payment and service.
East Kentucky Power Cooperative is often known as EKPC.
Also in the order, the regulatory board removed a cap on application fees for developers and said qualifying data centers are responsible for paying fees in addition to associated costs with providing the data center with service.
Eligible data centers are those that have a projected peak energy demand of 15 megawatts or more and there are separate rules for those anticipated to use more than 250 megawatts.
The state’s lone data center project, under construction in South Louisville (an area not serviced by the co-op, but by Louisville Gas & Electric and Kentucky Utilities), is projected to use 525 megawatts.
The order also said the co-op and the data center are encouraged to proactively address community concern through engagement programs like public meetings in order to “mitigate the community resistance to locating a data center in EKPC’s territory,” the order said.
In a statement following the order, EKPC President and CEO Tony Campbell said the tariff ensures cooperative members are treated fairly when data centers come to Kentucky and applauded the commission for approving the payment system.
“Data centers will provide the infrastructure enabling the next era of progress in science, technology, productivity, communications and even national security,” Campbell said. “EKPC is establishing the tools to accommodate that infrastructure if it located in Kentucky.”
The co-op is a nonprofit, member owned wholesale electricity company with 16 distributors serving 1.1 million Kentuckians across 89 counties with power generated through coal-fueled plants, natural gas-fueled plants and renewable energy plants.
“Due to the large scale of some proposed projects, energy agreements must be structured from the outset to ensure costs and risks are appropriately identified and allocated to data centers and to protect other cooperative members, which is the goal of this new tariff,” EKPC General Counsel David Samford said following the order.
Data center proposals across the state have increased following the Kentucky General Assembly’s passage of tax incentives that work to lure the developments to the commonwealth.
Many of those proposals have been met with loud public opposition in all corners of Kentucky where many residents have voiced concern over the environmental impacts of data centers, transparency of the deals to get them to locate in the Bluegrass State and worry their own electric bills may increase.
The fiscal court in Oldham County paused applications for data centers for about five months in July and since then, in Meade and Franklin counties, planning and zoning boards have voted against rezoning approval requests from data center companies.
In the co-op’s service area in Mason County, local government officials spent the summer as part of a global site selection process for a $1 billion, 1,200 megawatt data center.
While much of the process has been shrouded in secrecy, Maysville-Mason County Industrial Development Authority Economic Development Director Tyler McHugh said in August the campus would include single-story data center buildings, some office space and enough parking to support employees at both.
In a separate order, the Public Service Commission said Kentucky Utilities and Louisville Gas & Electric can move forward with plans to spend $3 billion on two natural gas power plants.
The pair of plants in Mercer and Jefferson counties will support an influx of high-energy demand customers — namely data centers for artificial intelligence — the utilities anticipate needing to support across the Bluegrass State in the next five years.
In the order, the commission did not make a final decision on another tariff for KU and LG&E’s data centers since consumer and environmental advocates are still intervening in the case.
This story was originally published November 6, 2025 at 10:27 AM.
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