Policy Agenda

Energy affordability remains a major factor in the cost of living, and Kentucky’s current system relies heavily on regulated utility structures that limit competition and reduce incentives for efficiency. As energy demand grows, particularly from industrial expansion,

the risk of rising costs for households and small businesses increases. Kentucky should move toward a more market-oriented energy framework that prioritizes competition, reliability, and affordability.

The state should expand retail energy choice by allowing large consumers to select their electricity providers and creating pathways for broader competition. Utility regulation should evolve toward performance-based models that reward cost reduction, operational

efficiency, and reliability rather than guaranteeing returns. Barriers to new generation should be reduced to encourage private investment and innovation, and the state should maintain a neutral stance on energy sources so that markets can determine the most effective mix.

The growth of data centers and other high-load industrial users presents both an opportunity and a challenge. These facilities drive significant investment but require substantial energy infrastructure. Without clear policy safeguards, the cost of servingthese users can be shifted onto residential customers and small businesses. Kentucky should adopt a clear principle that growth must pay for growth.

Under this framework, large energy users should be required to fully fund the infrastructure necessary to support their operations, including generation, transmission, and distribution costs. Rate structures should prevent cross-subsidization, and utilities should not provide

discounted or preferential rates that function as corporate welfare. Transparency should be improved by requiring disclosure of special utility agreements and cost-sharing arrangements.

Policies should also encourage these facilities to invest in on-site or privately procured energy solutions to reduce strain on the broader system. Economic development decisions should include clear analysis demonstrating that projects will not raise costs for existing ratepayers. This approach allows Kentucky to attract investment while protecting consumers and maintaining a fair energy market.