Residents of Eastern Kentucky are weighing the promise of data centers against concerns over rising energy bills.

Up an Eastern Kentucky holler near the city of Pikeville, Trissia Scott runs Thankful Hearts Food Pantry. On a recent Monday, she and her volunteers, including three men named Kenny, distributed food to seniors using equipment that is critical to the pantry's mission.

But keeping the electricity on has become a challenge. Scott said her energy bill for the food pantry is typically $900 a month at most. Then the bill jumped to $1,700. The most recent bill was $2,000.

Scott received a shutoff notice. Donations from a local church helped her avoid a shutoff, but she worries about what the bills will look like during the coldest months. In the coming weeks, she will also receive donated turkeys for Thanksgiving, and she has 11 freezers to keep running.

"I don't have enough to pay December, January, February, the bad months, so we're still asking people if they could go through the GoFundMe and help us if they can," she said.

Kentucky Power, which serves 162,000 customers in 20 eastern counties, has seen its load drop in recent years because of the closure of coal mines and a steel mill. Residents are also leaving the region, reducing the number of households paying for electricity.

As a result, the utility's remaining customers pay some of the highest bills in the state. Scott said she is paying more at home, too.

"My own home went up over $200," she said, "because we have people every day needing help for the power bills, and it's just going to get worse."

Now, Kentucky Power says a data center project two hours north of Pikeville could change that.

"What this really is is potentially a transformational opportunity for Eastern Kentucky," Sarah Lynch, a Kentucky Power spokeswoman, told WEKU at a recent open house for the project in Catlettsburg, near the site where Maryland-based TeraWulf plans to build a 1-gigawatt facility. That is about as much power as Kentucky Power currently generates.

The utility is building new transmission lines and a substation to serve what will be called the Muskie Data Campus. TeraWulf said it will pay for those upgrades if state regulators approve the plan, sparing residential customers another rate increase.

It's not supposed to be voluntary. Gov. Andy Beshear signed an executive order in August prohibiting the Kentucky Public Service Commission from approving utility rate increases that pass the cost of energy-hungry data centers on to residential customers.

It is unclear, however, whether Beshear's order has legal durability. So far, no one has tested it.

**Kentucky plans advance**

TeraWulf has also agreed to pay for a new power plant in the region, which will generate additional jobs and tax revenue.

"Bringing on a large-load customer like this is a really amazing game changer for us and for our customers," Lynch said.

Community members have mixed feelings. Data centers have generated a wave of opposition across the country, including in Kentucky. Critics cite environmental concerns, water and energy use, and the industry's deep ties to artificial intelligence as major problems.

In some Eastern Kentucky communities, elected leaders are actively pursuing data centers or are at least open to them, in part to make up for coal's decline and to counter rising electricity prices.

But energy bills in the region aren't the only thing going up. Utility companies are posting big profits.

American Electric Power, Kentucky Power's parent company, earned $1.2 billion in the June-to-September quarter, up from $972 million in the third quarter last year.

AEP's Bill Fehrman, the highest-paid CEO of a U.S. investor-owned utility last year, said in a statement last week that data centers can help keep rates in check for residential customers.

"As electricity demand accelerates, AEP is committed to having new large-load customers bear the incremental system costs they create and fund the investments required to serve them," he said.

In Eastern Kentucky, some officials have supported data center development and have signed nondisclosure agreements, which have raised concerns about transparency. The city of Pikeville has taken a different approach.

City Manager Reggie Hickman said Pikeville did not negotiate in secret with data center developers. The city also isn't offering property tax breaks, as some other Kentucky communities have.

"So for us, we immediately went to the public and said, you know, we're concerned about the same things you are," he said. "We're concerned about the water. We're concerned about the noise. We're concerned about the environment. We're concerned about the power rates. That whole litany of things that the public is concerned about, we are too. We live here, too."

Pike County was once the state's leading coal producer, but coal has faded. The bankruptcy of an operator there earlier this year resulted in 300 layoffs, cutting the county's number of industry workers by half.

Today, Pike County has more than 500 direct tourism jobs, exceeding the number of mining jobs in a region where coal was once dominant.

Hickman said a data center can replace some of the tax benefits the area got from coal, even if it cannot bring back jobs.

He said Pikeville could reach a data center deal within weeks. The facility would be built on a former coal mine that has been converted into an industrial park, away from residential areas.

The city will get the best deal it can or walk away, Hickman said.

"If the greater good can't get served, we don't have any problem at all with saying no," he said. "We'll try something else."

**Relief on the way?**

For Eastern Kentucky residents paying high electricity bills, data centers could mean relief.

Kentucky Power recently reached an agreement with TeraWulf to credit the region's residential customers $25 for three winter months a year for 10 years, starting in 2029.

Suzanne Barker Griffith, a retired public school teacher in Boyd County, where TeraWulf's Muskie Data Campus is proposed, said the credit would make a difference to her.

"What I'm concerned about is how much Kentucky Power might be trying to add to our bills at the same time," Griffith said, "but any time that we can even get our bills down a little bit, I'm happy about."

In February, state utility regulators approved a 6% rate increase for Kentucky Power customers, followed by a 1% increase next year. That raises the average monthly bill by $11. Had the commission approved the company's original request, the increase would have been $27.

In a region desperate for relief from skyrocketing energy costs, the temptation to bring on a large-load customer, despite other concerns, may be too great to resist.

The company's offer of $25 off winter power bills three years from now is not enough to impress Scott, however.

"You probably won't even pay the fuel costs that they put on your bill because they got all kinds of different things in your bill: school tax, state tax, fuel costs, all that," Scott said, "but that won't even make a dent in that."