Addressing Kentucky data centers and energy use in the ‘correct way’ | Opinion

As Kentucky’s largest utilities, it’s our privilege to serve Louisville, Lexington and all of our customers whose families, homes and businesses are in more than 90 Kentucky counties. We’ve supported our communities’ growth for more than a century – from the Industrial Revolution to the Digital Age today.

We have a unique vantage point in community conversations around economic growth, particularly data centers, and the tremendous number of new and expanding businesses establishing in Kentucky. This growth includes projects by companies such as North American Stainless, Toyota, Ford, GE, Global Laser Enrichment, Corning and many others who are bringing more jobs and opportunities for our communities.

Our Ohio Falls Hydro Plant was built in the 1920s to provide enough power at that time to cover all of Louisville’s energy needs. After upgrades over the years to maximize its capabilities, the plant produces the equivalent amount of energy for 22,000 homes, which is only about 6 percent of our residential customers in Jefferson County today. Residential customers use 35 times more power now than they did in 1925. What our predecessors assumed then is vastly different from what we know now.

We find ourselves at a similar crossroads, and it’s important we address how utilities like LG&E and KU are planning responsibly to protect our customers while also supporting this new growth –leading to more jobs, tax revenue for schools and community services, and new opportunities for our next generation.

First, dozens of data centers already operate today in our Kentucky communities. They weren’t constructed overnight as some assume. They were built over time as more businesses shifted in the last 10 years from on-site servers to cloud-based solutions, enabling employees to work from home, host virtual meetings and perform other important work. They allow us to use services like telehealth, check our medical and banking records from home, stay connected to loved ones around the world and store online our most precious memories for safekeeping. They allow us to stream the latest movies and enjoy our favorite music. They’ve become as integral to our daily lives as our highways and transportation corridors.

Second, utilities are protecting their customers with this rapid growth in mind. At LG&E and KU, we have a new special rate and require large energy users, like data centers, to commit to financial requirements up front and long-term contracts. This ensures these new large customers are paying for their fair share of the energy system. And as with any business, they are required to fully pay for infrastructure that’s only serving them.

At LG&E and KU, we also own our own power plants, and the power we generate is prioritized for our customers and communities first. For other utilities in Kentucky, they purchase power through entities called Regional Transmission Organizations. Their utility model is different than ours. What’s most important, though, is we’re each adding protections that are best for our utility models and our customers, and these protections have been reviewed and approved by our state regulator who agreed they were in our customers’ best interests.

Third, and perhaps most importantly, we have to address organized campaigns by special interest groups around data center development. Much of this debate takes place online or on social media relying on the very infrastructure under discussion—an irony that underscores how interconnected and important this issue has become.

It’s disheartening because these campaigns play on emotion to influence public perception and selectively present information in ways that can distort the full picture. While it may be presented under the guise of advocacy, it is important to recognize when persuasion is prioritized over facts. We’ve seen these campaigns mischaracterize utilities and diminish the important role of state regulators who are tasked with overseeing a transparent process to ensure rates remain fair, just, and reasonable for all customers. These complexities deserve thoughtful, fact-based discussion. Without it, we risk making decisions that could undermine Kentucky’s long-term economic competitiveness.

We appreciate the Kentucky General Assembly’s focus on the importance of energy here in the commonwealth and efforts to further propel Kentucky’s economic growth momentum – contributing more jobs and improved quality of life in our communities.

As Senate President Stivers recently said, “It’s a coming issue, so we need to make sure we do it in the correct way.” We couldn’t agree more.

Our role in the equation is simple: to keep the lights on and natural gas flowing safely, reliably and at the lowest reasonable cost for our customers today and generations to come.

It’s a privilege to power the places we each call home for more than a century. It’s our responsibility and commitment we make to our customers every day. We’re excited about Kentucky’s future. And planning for it is critical. If we don’t prepare now by making sound, prudent decisions that balance responsible growth and support economic development, we risk falling behind and missing out on the benefits this growth can bring to our communities. Just as our predecessors did more than a century ago, we can only imagine the limitless possibilities before us.

John R. Crockett III is president of the LG&E and KU utility company.