What, if any, benefit would a data center bring for residential electricity customers? That’s a question state regulators asked in a hearing on Tuesday.
The Kentucky Public Service Commission heard testimony from East Kentucky Power executives on their plans to meet electricity demand in the coming years.
That includes, potentially, demand created by data centers. Commissioner Andrew Wood called it the “third rail” of recent utility hearings on customer rates.
Jacob Watson, manager of rates and regulatory for East Kentucky Power, said data centers wouldn’t necessarily mean lower rates for customers. Instead, they might see other benefits.
“You would probably be see a sustained period between rate cases, where we're able to control and manage rates for a longer period of time between rate cases,” Watson said. “I didn't want to phrase that in a way though that if you see a data center come on, that you would see us file a rate case to reduce our rates, you would likely see longer periods with lower increases.”
A rate increase for East Kentucky Power customers is pending before the commission.
East Kentucky Power received approval last year from the Kentucky PSC for rates and terms for future data centers in its 89-county service territory. East Kentucky Power has about 570,000 customers statewide.
Data center demand could be met with East Kentucky’s existing generation, as well as new sources it plans to build.
Those include a 745-megawatt natural gas plant in Pulaski County, a 214-megawatt natural gas facility in Casey County, and solar facilities in Fayette and Marion counties.
A proposed data center near one of East Kentucky’s existing plants in Mason County has drawn public opposition. Local officials and the utility have signed nondisclosure agreements, and they decline to discuss the proposal publicly.
East Kentucky is not under contract to power a data center, utility executives testified Tuesday.
