An election-season battle is brewing over what could be the nation’s first massive data center operating on federal land. And you almost certainly have never heard of it.
Come with me to McCracken County, Kentucky, just outside its largest city, Paducah, where the Energy Department is allowing new development at a large brownfield property. First constructed in the 1950s, the Paducah Gaseous Diffusion Plant was once the country’s only uranium enrichment facility, but it closed in 2010. Since then, and after years of cleanup, Paducah city officials and the McCracken County government have sought to revitalize and reindustrialize the site.
In July, the Energy Department announced plans for a data center at the site, one with enough power to provide excess electricity to the surrounding community. Brookfield would develop and operate the data center and NextEra Energy would build the power infrastructure — a roughly 2.5 gigawatt natural gas plant — while local and regional electricity companies and co-ops would help provide wholesale and retail electricity. The project would be built alongside new uranium enrichment projects cropping up at the site, as federal officials and companies involved seek to transform the area into what they call an “American energy hub.”
Government officials at all levels welcomed the new project. An opposition group called Protect McCracken County exists and is active, but opposition has yet to manifest in the kind of dust-up or mass protest we’re seeing elsewhere in the country. Media reports indicate a likely reason for this is the longstanding history of industrial development in this specific area and that the project location was already contaminated as a brownfield site. The worst headlines about the data center news saw residents calling it “bittersweet” and a “necessary evil.”
But something important was missing because the project was on federal land: city officials say they never had a formal opportunity to deliberate it themselves — a step even local governments supportive of development often use to get assurances and benefits from developers.
The investment announcement also caught officials by surprise. Kentucky Governor Andy Beshear, a centrist Democrat with presidential ambitions, told Politico he was never briefed on it. Paducah City Councilor Dujuan Thomas told me this week that the first time he met with any individuals involved “was a week before the public announcement, or a few days before it.”
“At the end of the day, it’s already set in stone,” said Thomas, who supports the data center being built. “I don’t think there’s anything that can be done aside from a federal intervention that could ever stop something like this from happening. And I’m trying to be a realist about it.”
“I’m more of a glass-half-full type of person,” Thomas added.
Now, the fight over asking for more is dominating the race for McCracken County judge/executive, which is the county’s top job. Paducah’s mayor, George Bray, a former Republican-turned-independent, is running to oust two-term Republican incumbent Craig Clymer. In recent weeks, Bray has called for negotiating a community benefit agreement with the developers and says Brookfield already expressed willingness to do so. “Data center developers, knowing how sensitive communities are about electrical usage, water usage, and noise … have been open to embracing the community and saying they want to be good citizens,” he told me in an interview.
Specifically, Bray wants a community benefit agreement to potentially include an economic development fund to help jumpstart new housing in the area, knowing there’ll be an influx of labor. The county will also need to support volunteer fire districts, especially if there’s a blaze at the site. Those are only two ideas he offered, acknowledging the subject of data centers is new to him and that he believes the agreement “should be something the community itself comes up with.”
“I would not approach it as, What do I want? I would be talking with others,” he told me. “There are many things that a project of this size is going to drive in our community. I think we just need to be open-minded and practical about it.”
Bray’s push came up at public debates during the campaign for county judge executive and has since spilled over into social media spats between Bray and Clymer. Bray claims the only official who can adequately negotiate this kind of agreement with the developer is the county judge/executive because the project is not within the Paducah city limits. Clymer, meanwhile, denies everything Bray is claiming.
Clymer says a community benefit agreement is unnecessary, would indicate hostility towards the business community, and is only being brought up so Bray can differentiate himself in the election. He also told me the county will receive incredible levels of tax revenue from the project, and this in and of itself will mean lots of benefits.
The developers “have not asked for one thing from the community. They haven’t asked for a property tax abatement — I told them early on we’d send them a tax bill and they said they understood that’s what I intend to do. No payback on anything; they’re going to build their own infrastructure there within the facility. They’re going to provide their own power through NextEra,” Clymer said. “The bottom line is, it’s not going to cost the community a penny to have this $100 billion investment in our community, and the benefit from it is just going to be enormous through the property tax and occupational tax.”
Clymer also claims key protections for the community, including ratepayer guardrails, are written into the lease agreement DOE struck with Brookfield for the data center. I asked Clymer if the lease agreement was public; he said no and that he personally hasn’t seen it.
“I’m telling you what they’re telling me and I don’t think anybody’s lying about it,” he said. “Let’s be satisfied it’s not going to cost us a penny and it’s going to create enormous wealth for us.”
Brookfield declined to comment for this story. The Energy Department and NextEra did not respond to requests for comment by publication time. We’ll update our story with answers from them when we hear back.
