(LEX NEWS) — Update: Aug. 6 at 6 p.m.

Gov. Andy Beshear signed an executive order on Thursday establishing a framework to protect Kentuckians from the "harmful impacts" of data centers.

Under the order, companies must submit an initial energy plan to the Energy and Environment Cabinet (EEC), proving their data center won't raise electric bills for nearby homes and businesses.

Beshear is also directing the Kentucky Public Service Commission to prohibit utility companies from raising rates to recover any costs caused by the development or operations of a data center.

The order comes amid a national conversation about data centers and whether American power grids can handle the increased electricity demand without impacting regular people.

When asked whether he has concerns about the state's power grid handling a surge in demand, Beshear said:

"Our energy system right now - without additional production - no, can't handle a ton of data centers. And that's the United States, not [just] in Kentucky. So, as they build out the data center, they've got to be building out the new means of production too."

Beshear said his order ensures those costs cannot be passed on to residents.

"The plan and the directive to the PSC are designed to make sure there's no back door where those costs are being passed on and that our families don't pay a single penny extra," Beshear said.

The order also directs the Kentucky Energy and Environment Cabinet to deny permits to any data center sites that would negatively impact air quality, water quality, protected land and natural resources.

“The governor’s executive order and his directive are clear. The cabinet simply will not permit, not issue a permit that’s not protective of human health, our natural resources, and the environment,” said John Lyons, the Energy and Environment Cabinet secretary.

The executive action also requires data center developers to commit to engaging with transparency in public discussions with local community leaders and residents.

“Local leaders and residents know their communities best. I trust their judgment when it comes to significant projects like these," said Beshear. "And you can be sure that I will be actively monitoring any and all data center projects that move forward.

Original Story:

Gov. Andy Beshear is set to sign an executive order establishing new expectations for companies seeking to develop data centers in Kentucky, saying the move is intended to protect communities as demand for large-scale computing facilities continues to grow.

"In response to the surging demand for data centers and energy resources across our country, I'm announcing an executive order that I'm signing to protect against any harmful impacts from potential data centers," Beshear said.

Beshear detailed during a Team Kentucky meeting on Thursday the executive order creates a framework to help ensure data center companies looking to do business in Kentucky:

• Invest responsibly
• Operate transparently
• Work in partnership with Kentucky residents and local communities

Beshear said the order is designed to balance economic development with the need to safeguard communities from potential impacts associated with rapidly expanding data center projects, including increased energy demand.