Data centers are not the answer to Kentucky’s industrial and economic woes

Data centers are taking over sites that could still support manufacturing, and that shift matters. These projects generally bring fewer permanent jobs than the industrial facilities they replace, while doing little to strengthen the local supply chains that manufacturing depends on. For a region built on manufacturing, it marked not just the loss of a facility, but the erosion of an industrial backbone that supports workers, local businesses, and entire communities.

For primary aluminum producers, the problem starts with electricity. The number-one reason aluminum smelters in the U.S. cannot compete is the cost of power, and data centers are now competing for the same scarce electricity at massive scale. 

That competition is already shaping Kentucky’s economic future. A new smelter that was supposed to come to Kentucky ultimately went to Oklahoma because Oklahoma had the clean energy infrastructure to support it, while Kentucky did not. In a survey conducted by Industrious Labs in Kentucky last year, the majority of respondents actually wanted the new smelter to be built in their state — and they wanted it because of the jobs the smelter would provide. Supporters of a new smelter also said they preferred it over a new data center. 

That loss should be a warning: if Kentucky cannot offer affordable, reliable clean power, it will keep losing industrial investment.

Ratepayers are right to be worried. Communities across Kentucky are pushing back against data center build-out because they do not want new facilities to drive up household electricity bills or leave existing customers paying for new power infrastructure. Those concerns are not abstract; they are about whether families, farms, small businesses, and manufacturers will be stuck covering the costs of a grid built to serve the biggest users first.

That is why Kentucky needs a different path. Local governments and state leaders should invest more in clean energy and grid capacity so manufacturers like primary aluminum producers can compete on a level playing field. Cleaner, renewable energy can also deliver health benefits by reducing pollution and harmful environmental impacts caused by data centers while supporting the long-term industrial jobs that sustain communities.

The choice is not between progress and stagnation. It is between an economy that works for a few large power buyers and one that works for the people who live and work in Kentucky.

Kentucky should not let its future be decided by who can buy the most electricity at the highest rate. It should invest in the energy system that keeps manufacturing alive, protects ratepayers, supports public health and environmental safety, and builds stronger local economies.