Key Takeaways

  • TeraWulf’s proposed Hawesville project has intensified concern about electricity rates, infrastructure costs, noise, and future expansion.
  • Research suggests large data centers can add local technology jobs, but typical gains remain modest compared with manufacturing employment.
  • Kentucky’s ability to expand affordable, reliable clean power may shape whether it attracts data centers, industrial plants, or both.

TeraWulf’s proposed data center at the former Century Aluminum site in Hawesville is becoming a test of Kentucky’s economic development priorities. The project offers a path to reuse a major industrial property, but it also places a high-demand computing facility on a site once associated with one of the country’s few remaining aluminum smelters.

That tradeoff came into focus at a July 27 public meeting before the Kentucky Public Service Commission. Residents and former Century Aluminum and Big Rivers employees questioned whether the data center could increase utility rates, create persistent noise, or expand beyond the scale initially presented.

For state officials and utilities, the issue is bigger than one site. Data centers consumed 4.4% of U.S. electricity in 2023, equal to 176 TWh. A U.S. Department of Energy backed analysis projects that the sector’s share could reach 6.7% to 12% by 2028.

That growth makes access to generation and transmission a competitive asset. It also creates difficult allocation questions in states where households, manufacturers, and new computing campuses may depend on the same constrained system.

Aluminum smelting is already exceptionally sensitive to power prices. When data centers enter the market as large, round-the-clock buyers, they can compete for electricity and grid capacity with industrial facilities whose commercial viability depends on affordable energy. Kentucky has already seen a planned smelter choose Oklahoma, which had the clean energy infrastructure needed to support it.

A survey conducted by Industrious Labs in Kentucky last year found that most respondents wanted the new smelter built in the state because of the jobs it would provide. Supporters also preferred a new smelter over a new data center. That does not mean communities oppose technology investment as a category. It suggests they are comparing the depth and durability of the economic benefits.

The employment numbers help explain that skepticism. Brookings found that the first large data center in a county raises local data-processing employment by 56% over a decade. Yet the typical county gains only about 100 to 200 jobs, wages remain unchanged, and home prices increase by 2% to 5%.

Construction generates temporary contracting activity. Once operational, however, highly automated facilities generally employ relatively small permanent workforces. A smelter or other major manufacturer can support production jobs, maintenance contractors, transportation providers, equipment suppliers, and downstream customers. The two investment models leave different local footprints.

Tax incentives do not settle that comparison. A 2026 analysis from the University of Kentucky Center for Applied Energy Research notes that power availability, land, and fiber tend to carry more weight in data center location decisions than tax breaks. If those fundamentals drive investment, broad incentives may provide limited leverage while reducing public revenue.

Who pays for the required substations, transmission upgrades, generation, and reserve capacity? That is now the central regulatory question. Special contracts can help assign costs to a large customer, but protections depend on rate design, minimum-payment commitments, expansion terms, and what happens if a project closes early or consumes less electricity than forecast.

Kentucky can pursue data center investment without treating every project as an automatic industrial win. Regulators could require clearer load forecasts, transparent infrastructure accounting, customer protections, noise controls, and enforceable terms covering future expansion. State and local officials could also evaluate permanent employment, supplier activity, power use, and public costs alongside headline capital investment.

More clean generation and grid capacity would give Kentucky greater room to support computing facilities while competing for aluminum and other power-intensive manufacturing. Without that expansion, TeraWulf’s Hawesville proposal highlights a harder reality: scarce electricity may force Kentucky to choose which industries receive priority, while families and existing businesses watch closely to see who carries the cost.