We sat down with Kentucky's state Senate leader to talk all things data centers in part one of our conversation with President Robert Stivers.

Our Emily Prince asked him how the legislature can protect Kentuckians from a spike in their utility bills.

President Robert Stivers, Senator from Clay County, thank you so much for sitting down with us here in the Capitol Annex.

It's good to be here.

Glad to be here.

Glad you're here.

Well thank you.

So let's talk about data centers.

And you wrote an op ed last month saying that Kentucky has the opportunity to lead on data centers if they're done right.

So the question is, how are they done?

Right?

So how do you balance attracting these companies that use a lot of energy while making sure that Kentucky ratepayers don't see an increase in their bills?

Well, that's the the real biggest component of is the key about doing it right.

One you don't want the consumer as they exist, and the consumer may be residential or another business or commercial to bear the costs.

And there's two places you look at cost.

One is if there's an additional additional generation or two and we get a little wonky grid construction.

The grid is basically your wires, your lines, your poles.

But the generation is that plant, that generator, be it from coal, fire, hydro.

We don't have nuclear yet.

Wind, solar.

Take your choice of how we gas is another one of how that that is generated.

But you don't want you or me or the other people to pay for those costs that are needed to be incurred to do that generation and grid transmission to the plant.

That should be that individual but entity, that consumer that bears the cost.

That's the biggest priority in this discussion.

Yeah.

Well, and that's the million dollar question, right, is how do you ensure that that's what takes place?

That's where the PSC and right now they've done a pretty good job of saying that.

That has to be what people will call tariffs or full cost allocation.

Full cost allocation, allocate the full cost to the entity.

Now, if we need to do statutory changes, that's what we're looking at to make sure there's parameters that the PSC will work with within, because there's always little different circumstances because we have two types of delivery.

We have the co-ops, which are subsidized by the government to get to more rural areas.

And we have the investor owns like Q, LG and Duke American Electric Power.

They have different models.

So you have to deal with them a little different, like when you look at that right.

And you brought up statutory regulation.

So that's something I wanted to ask you about.

You know, last year the House passed a bill to regulate data centers.

It didn't make it across the finish line in the Senate.

What do you think was missing from that bill?

And what might you need to address next session?

Well, we've had discussions and I want to say Josh Bray, who I was going to just say Josh, but Josh Bray did a good job, but I think he was more focused because of the area he comes from on the co-op model and really didn't consider what we call the investor owned the private companies like an LG, and so we've had some discussions about that.

And that's that is the costing of the delivery of energy.

That's one component.

And so we're we're having discussions about how you deal with the full spectrum of companies that generate electricity.

I think Josh was more focused on the co-op model.

You know, Josh bright, representative Josh Bray, I should say, has come out and said that he plans to file a bill.

I believe he said within the first week of the next session, which is about four months away.

Now, would you support a piece of legislation to to have regulation?

I hope, I hope before he files it.

And we're kind of formulating a process that will have some discussions and that maybe we can incorporate some of our thoughts into the bill.

And we could do just basically a joint announcement that this point to be the bill we're going to try to support.

But I fully expect him to do that.

And he fully expects us to have ideas and thoughts that may be similar, or maybe in addition to what he would do right.

Now, of course, we know that Governor Andy Beshear, he put out an executive order related to this regulations.

But there's been a lot of question about how enforceable actually is that.

What are your thoughts about it, and are there pieces from it that you could consider that for legislation?

There are some of the things I've said this some of the things that he has talked about are the areas that we're looking at.

And, you know, I said, you know, they are the kind of the right path, but we need to have more definition.

But he doesn't have the authority to make laws.

He executes on laws.

So the executive order, I think, is just more of a kind of a stake holder, a position, a flag in the ground saying, hey, I think we should go this way, but it really has no influence or authority over the process right now.

Something that has a lot of or some folks, I would say fired up about data centers is this idea that they can apply for tax incentives.

So in 2025, there was a bill passed that they could apply for incentives specifically for data center equipment up to 50 years for sales and use tax.

You know, the Kentucky Center for Economic Policy really criticized it.

There have also been some leading Republicans who have kind of questioned it.

What are your thoughts on where that stands and should that be reconsidered?

The only thing that is there for the data centers, hyperscalers are on the equipment.

Nothing related to income tax for the workers who are going to work there, or the workers who are going to build it.

Nothing on property tax.

They still pay the full property tax on both the building and the equipment that is put in there, tangible property tax.

It's a very limited and narrow type of tax compared to all the other incentives that we have for other projects in the state of Kentucky, but a lot of people don't know that.

So, you see, I mean, they're the majority caucus chair, Robby Mills.

He said maybe we should reduce it to maybe ten years or something like that.

What do you think about that?

Well, there's there's some discussion about that, about what the duration should be.

The duration is probably longer than most, but, I don't know that we need to draw it back a lot from what we are, or we may not be in a position to be competitive, for attracting new types of businesses in that realm.

And what a lot of people don't understand, too, is I think there's something like 40 or 50 data centers already in Kentucky, and a lot of people don't realize how many have already located here.

Right?

And from what I understand from my reporting a few weeks ago was that none of those data centers have, received the tax incentives, right?

So not of this buying.

They may have received other types of tax incentives, but not of the type that we're talking about here.

I got to ask you one more one more question on that topic.

Just because I think a lot of people do have questions about it.

I think the question is for many of these companies, we'll say terawatt for example, is, you know, not basic, of course, not in Kentucky, but has a lot of money.

The question is, do we need to be given these companies offering them tax incentives?

Well, that's a really a good philosophical debate.

Do you want and let's just talk about the benefits of it.

So you have a piece of property unimproved.

Think about it like your house.

You're going to build your house.

Until you have a piece of property, you pay $50,000 for the acre.

And I'm just using examples, and then you build a $250,000 house on it.

That property is now worth $300,000.

And what type of property tax does it generate?

It does generate.

Well, you take that piece of property that is 200 acres and add $1 billion in value.

Think of what it does for your school system, which are the primary beneficiaries of property tax.

What that then filters down for your teachers and your bus drivers.

And what can be done facilities.

It can be generated or can be built off the generated income.

The jobs which will be more than 100.

The high paying jobs.

These are $100,000 a year jobs or better for the people who operate.

It doesn't go into the end.

You include the security people and these are top flight security people.

So to be competitive and try to draw them to our area, I think you do want to look at an incentive package.

Thank you Emily.

Great questions there.

And we're going to have part two of our conversation with President Stivers tomorrow night as we discuss how communities are grappling with data centers and which communities he thinks are not suited for the projects.