Kentucky Bitcoin mine transforms into data center; three-year conflict over 50-megawatt load siting continues.

For roughly three years, a bitcoin-mining facility has operated inside Hopkinsville Electric System's Holland Substation. The discovery of this 15-megawatt operation, owned by North Campbell Land Co. and consisting of 22 modular units housing specialized mining machines, has prompted Hopkinsville officials to draft their first data-center zoning rules.

The issue came to a head during a Monday evening hearing at Hopkinsville Community College, where Community and Development Services sought public input on how the city should regulate data centers. Currently, Hopkinsville's zoning code does not list data centers as a separate land use, though a July 17 working draft would classify cryptocurrency mining as one.

North Campbell Land Co. representative Thomas Masiero noted that the existing site could eventually shift to computing work beyond bitcoin mining. NCLC has separately proposed a 50-megawatt data center elsewhere in Hopkinsville, alongside a new 65-megawatt substation the company says it would fund at an estimated cost of $8 million to $10 million. "To the best of my knowledge, there has not been a noise or water complaint against our facility during the three years of operation," Masiero said.

Data centers and crypto mines have become contentious nationwide due to their massive electricity consumption, noise generation, cooling requirements, and often-polluting backup generators. Their effects can reach nearby neighborhoods, local water supplies, and the electric grid. However, utilities frequently view large flexible-load customers favorably from a financial perspective. Hopkinsville Electric System general manager Jeff Hurd explained: "To avoid future rate increases on the backs of our customers, HES is constantly looking for additional revenue to offset these costs." Masiero added that the mining operation can substantially reduce its power draw when TVA demand spikes.

The proposed zoning amendment sorts projects by electrical load and physical footprint, capping large-scale facilities below 75 megawatts and 50,000 square feet, with hyper-scale data centers at or above those marks barred entirely. The draft also establishes buffer distances: 300 feet for small sites, 500 feet for mid-size ones, and 1,000 feet for large facilities near homes or public properties. Operations already running would retain legal nonconforming status.

Attorneys for HES and NCLC argued the draft is overly restrictive, particularly regarding setbacks. NCLC attorney Robert Ison stated, "Make no mistake, if you adopt the more restrictive ordinance, you will effectively ban data centers in the city of Hopkinsville." He also said, "For too long in Hopkinsville, the first response to a new idea or innovation has been to say, 'No.'"

Residents pushed back with calls for stronger protections. Pembroke resident Sherry Byerline warned, "Once they get in and get a foothold, they pretty much do what they want to do, and this creates continuous pollution." Hopkinsville resident Becca Hostilo urged the city to require closed-loop water systems, consider capping the number of centers, and "make sure that Little River and Lake Barkley are kept safe."

Community and Development Services is now drafting the amendment before sending it to City Council for final approval.