Lawmakers want to get KY into the nuclear energy game, but doubts still loom
Senate Republicans want to jump-start nuclear energy development in Kentucky by fueling investment in small, prefabricated reactors to power data centers and other private-sector projects.
Amended legislation that cleared the state Senate Natural Resources and Energy Committee Wednesday would set aside up to $75 million to help developers cover federal nuclear site permitting costs.
Lawmakers said they want to ensure the Bluegrass State remains at the forefront of emerging, small-scale nuclear energy technology so it can compete with states like Tennessee and Texas, which have already invested more than $100 million in new-generation commercial reactor development since 2023.
The bill’s sponsor, Sen. Danny Carroll, R-Paducah, whose Western Kentucky district encompasses the state’s largest U.S. Department of Energy-owned nuclear remediation and cleanup site, has emerged a champion for nuclear energy development in the commonwealth.
He painted a picture during testimony Wednesday of what he called his vision for Kentucky’s nuclear energy future. It begins, he said, with the passage of SB 57, which paves the way for a rapid influx of fourth-generation small modular reactors: factory-built energy generation units designed to meet specific, private-sector needs.
“This is the next step, and arguably the most significant step, towards a nuclear economy and a nuclear ecosystem in the commonwealth,” Carroll said. “Kentucky is well-placed right now within the nation when it comes to nuclear energy.”
Kentucky enters the nuclear race
The state is actively jostling with others to secure nuclear technology investments that could give it the leg-up in a global energy market it once enjoyed when coal prices were high. But Kentucky is a relatively late entrant, as the Republican-controlled legislature has historically resisted opening doors for fuels that would compete with once-dominate coal.
It wasn’t until 2017 the General Assembly lifted a moratorium on nuclear power plant construction. Since then, Carroll and a nascent pro-nuclear caucus have acted swiftly to convince other leery lawmakers to establish the Kentucky Nuclear Energy Development Authority in 2024 and give it grant-making power.
Now, a GOP more unified behind the premise of nuclear power’s return on investment hopes to feed KNEDA money to clear red tape that snags energy development projects in their infancy.
“If anybody would have told me 20 years ago that this underground coal miner would have been on a nuclear task force and voting yes for this, I would have had to seriously question that,” said Sen. Robin Webb, of Grayson, a pro-coal Eastern Kentucky Republican.
Advanced small modular reactors are an alluring target for states like Kentucky that don’t produce any nuclear energy. The compact, factory-built designs could get online and scale up more quickly than traditional, large-scale nuclear plants, more seamlessly filling in gaps in the energy grid left behind by power-hungry artificial-intelligence data centers.
There are not yet any fully operational SMRs in the U.S., according to the intergovernmental Nuclear Energy Agency, but Kentucky would not have to look far for a private-public partnership model to base its program. The Tennessee Valley Authority is awaiting federal approval for a construction permit to build a 300 megawatt water-cooled small reactor west of Knoxville.
Carroll’s bill would steer up to $75 million in KNEDA grant funding to help similar partnerships between utilities, developers and hyperscalers, such as Google or Amazon, cover the cost of securing U.S. Nuclear Regulatory Commission site and construction permits and joint licenses. Each project would be eligible for up to $25 million, and the General Assembly would have the final say on any allocated funds.
“This would put Kentucky forward,” said the University of Kentucky’s Director of the Center for Applied Energy Research Rodney Andrews, who chairs the KNEDA board.
Carroll told the Herald-Leader he expects to submit to Senate leadership a budget request to add another $75 million to the KNEDA grant fund in addition to the $75 million in SB 57 to help pay for “other nuclear projects” in Kentucky.
Consumer groups push back
Environmental and consumer-rights groups oppose SB 57 because it shifts the financial risk of a nuclear project onto ratepayers without adequate safeguards
The state would require utilities on the receiving end of KNEDA site-readiness grant funds to post a surety bond that would allow the state to recover its investment if a project goes south. But utilities would still be allowed to recover their own investments without those same protections, said Audrey Ernstberger, an associate Kentucky Resources Council attorney.
“This structure actually weakens a longstanding used and useful safeguard that’s been a part of Kentucky’s energy policy principles and has traditionally protected customers from financing projects that may never deliver service,” Ernstberger said.
Carroll insisted grant-funded projects would still undergo a thorough Kentucky Public Service Commission reviewal process before getting a final go-ahead. The three-step process requiring KNEDA, legislative and PSC sign off on nuclear projects adds more protections, not less, he said.
He said his bill could also offer unique protections for ratepayers who are faced with an unfair burden of paying for energy-intensive data centers in Kentucky, since much of the dispatchable energy small reactors produce would cover their own demand.
Communities have pushed back against data center projects in Kentucky, partly because of the untold effect they could have on power rates. Rep. Josh Bray, R-Mount Vernon, introduced legislation earlier this week that would prevent utilities from connecting to the public grid unless they sign a contract agreeing to cover their share of transmission and infrastructure costs.
Nuclear start-up costs are also high and could pose significant risks to ratepayers, Ernstberger said. The TVA reported spending about $200 million for early site permit preparation at its Clinch River Nuclear Site west of Knoxville.
The Nuclear Regulator Commission typically charges about $320 an hour for site applications that can take years as applicants conduct studies, collect environmental data and prepare materials for review. Those costs would be cut by more than 50% for the advanced small-scale reactors for which Carroll said he believes Kentucky is primed.
A rule the commission promulgated late last year reduces the hourly rate to $148 for next-generation systems with enhanced efficiency and safety protocols. SMRs with molten salt- or gas-cooling systems are prefect candidates, Carroll added.
His bill was read on the Senate floor Thursday and recommitted to the Appropriations and Revenue Committee for consideration.
This story was originally published February 13, 2026 at 5:20 AM.
