Kentucky’s HB 593 data center bill was a 2026 measure that would have required data center companies to pay the full cost of the electrical infrastructure their facilities demand, keeping those expenses off the bills of ordinary utility customers. Sponsored by Rep. Josh Bray, a Republican from Mount Vernon, the bill passed the Kentucky House 90 to 8 but died in the Senate on the final day of the 2026 legislative session, April 15, without receiving a floor vote.
What the Bill Would Have Required
HB 593 applied to any facility with a peak energy demand of 15 megawatts or greater and a monthly load factor of 60 percent or higher. Every requirement in the bill flowed from a single principle: the data center pays its own way.
Data center customers would have paid the “full actual cost” of all studies, development, and capital investment needed to serve their facilities, including prepayment for estimated infrastructure costs. Contracts between utilities and data centers had to prevent “the subsidization of data center customers by non-data center customers through rates or by any other means.”
To apply for utility service, a developer would have had to pay a nonrefundable fee of at least $75,000. Bray described the fee as a way to “separate the wheat from the chaff” and discourage speculative projects.
Larger projects faced additional requirements. Data centers with contract capacity above 25 megawatts (for municipal utilities) or 250 megawatts (for retail electric suppliers) would have had to secure dedicated power sources or capacity agreements. Costs of serving data centers could not be allocated to customers of natural gas, water, or wastewater utilities. Data center loads would not count toward a retail electric supplier’s peak load when calculating net metering caps. And any qualified data center seeking state economic development incentives would have had to certify compliance with the bill in its agreement with the Kentucky Economic Development Finance Authority.
Utilities would have been required to file tariffs describing the application process and to run studies confirming that serving a data center would not degrade rates or service quality for other customers. Municipal utilities had 180 days to issue compliant tariffs.
The bill carved out several exemptions. Data centers on U.S. Department of Energy sites, contracts signed before the law’s effective date, and distributors of Tennessee Valley Authority electricity (where compliance would conflict with TVA rules) were not covered.
Why Lawmakers Wrote It
The bill was a response to an extraordinary surge in proposed data center development, driven largely by demand for artificial intelligence computing. As of March 2026, Louisville Gas and Electric and Kentucky Utilities reported 29 potential data center projects in their service territory, with 11 of them — totaling roughly 3.5 gigawatts — considered to have at least a 50 percent chance of moving forward. Total prospective demand in LG&E/KU territory could reach about 12 gigawatts, according to the parent company’s CEO. East Kentucky Power Cooperative separately reported 11 active projects seeking more than 10 gigawatts.
Kentucky utilities generated a maximum of 18.4 gigawatts during the summer of 2024. A single 100-megawatt data center draws power equivalent to the continuous average consumption of about 80,000 homes.
Kentucky is a regulated, vertically integrated utility state, meaning utilities are obligated to serve customers and typically recover infrastructure costs through rates charged to all customers. The Kentucky Energy Planning and Inventory Commission warned in a June 2026 report that, without specific rules, infrastructure costs could flow into the general rate base and shift the financial burden to residential and commercial ratepayers who had nothing to do with the new demand. Once a utility investment is deemed “used and useful” and enters the rate base, the Public Service Commission has limited authority to reassign those costs.
How the Bill Moved and Where It Died
HB 593 was introduced on February 6, 2026, and referred to the House Committee on Economic Development and Workforce Investment. The committee reported it favorably with a committee substitute on February 26. The full House passed it on March 4 by a vote of 90 to 8.
The bill crossed to the Senate on March 5 and went to the Committee on Economic Development, Tourism, and Labor. The committee took the bill up on March 27 and gave it a second reading on March 31 before returning it to committee. It never received a third reading or a Senate floor vote.
In a final attempt, lawmakers grafted the data center provisions from HB 593 onto Senate Bill 197 in late March. On April 15, 2026, the last day of the session, the House budget committee stripped the data center language out of SB 197. The amended bill passed without any data center provisions and was sent to Governor Andy Beshear, who exercised a line-item veto on unrelated portions before it became law as Acts Chapter 202.
Bray acknowledged the effort was “dead for the session.”
Who Supported It and Who Blocked It
Bray was joined by co-sponsors including J. Petrie, D. Elliott, J. Gooch Jr., K. King, and House Speaker David Osborne. Bray had chaired the Kentucky General Assembly’s artificial intelligence task force for two consecutive interim periods and framed the bill as ensuring “every day customers are not subsidizing” data center development.
Democratic Rep. Adam Moore of Lexington filed a companion measure, HB 544, the “Kentucky Ratepayer Protection Act,” which would have required PSC approval for any data center contract exceeding 100 megawatts of aggregated capacity. HB 544 never advanced beyond its House committee.
The Kentucky Resources Council called HB 593 a “positive first step” toward protecting ratepayers, and the Sierra Club described it as “a strong and necessary step in the right direction.” Both groups urged the legislature to go further with state siting board approval and transparency requirements. Senate President Robert Stivers, a Republican, voiced support for adding “guardrails” to curb what he called “cowboy speculators.”
The bill’s most consequential opponent was Louisville Gas and Electric and Kentucky Utilities, the state’s largest investor-owned electric utility. LG&E/KU said it supported protecting customers but argued that HB 593 was a “one-size-fits-all approach” that would constrain how the utility sets rates for large-load customers. Spokesperson Liz Pratt said the legislation as written “would have eliminated” the option for communities to pursue economic benefits from data center development.
The utility preferred handling cost allocation through individualized tariffs approved by the PSC. In February 2026, LG&E/KU received PSC approval for an “Extremely High Load Factor” tariff requiring large data center customers to sign 15-year contracts and pay for at least 80 percent of their forecasted monthly energy consumption, even if actual usage fell short. The company was simultaneously pursuing a $3 billion investment in two new gas-fired power plants with 1.3 gigawatts of combined capacity, citing projected data center demand.
Bray identified LG&E/KU as the primary force blocking the bill. Stivers took a middle position, suggesting investor-owned utilities should be allowed to establish their own high-load tariffs subject to PSC approval, and said discussions would continue during the interim before the 2027 session.
What Protections Exist Without the Bill
Part of the Senate’s reasoning for not advancing HB 593 was that the PSC already had tools to protect ratepayers. The commission regulates utility rates, reviews the prudency of infrastructure investments, and approves tariffs and special contracts.
The most detailed existing tariff is the “Data Center Power” rate approved for East Kentucky Power Cooperative in October 2025. It applies to loads of 15 megawatts or more and requires each project to enter a special contract approved by the PSC. The commission removed the original cap on application fees, letting EKPC charge the full actual cost of processing an application and conducting studies. Collateral requirements were set at a minimum of six months of expected maximum monthly billings, up from EKPC’s original proposal of two months. Projects exceeding 250 megawatts must secure a dedicated energy resource through a mandatory rider. Contracts also must include provisions evaluating whether posted collateral would cover a data center bankruptcy.
LG&E/KU has its own PSC-approved high-load tariff, as described above.
Critics, including the Kentucky Resources Council, argued utility-specific tariffs were not enough. They pointed to gaps such as the absence of statewide mandates for load flexibility, contributions-in-aid-of-construction, and stricter collateral and exit fee requirements. The EPIC report emphasized that cost allocation rules need to be set before infrastructure commitments are made.
What Happens Next
With statewide legislation stalled, some Kentucky communities have acted on their own. The Cave City Council enacted a one-year moratorium on data center permit applications. In Mercer County, the planning and zoning commission considered an ordinance allowing data center campuses of at least 300 acres, with a countywide cap of 1,500 acres, though residents voiced opposition over noise, health, and rural-character concerns. Data center proposals have already been defeated or faced heavy opposition in Oldham, Simpson, and Meade counties.
Republican lawmakers have signaled they intend to revisit ratepayer protections during the 2027 legislative session. Whether Kentucky ultimately adopts a statewide framework or continues to rely on the PSC’s utility-by-utility approach will likely depend on how many of the proposed projects break ground and how the costs begin appearing on Kentucky electric bills.