SerpApi.Org
A data center broker based in the United Kingdom is eyeing a former steel mill near Ashland to house a record-breaking $12 billion computing campus capable of consuming the same amount of energy as nearly 2 million homes.
Rubix Data Centers, part of a Spanish artificial intelligence and cloud services firm, has identified roughly 500 acres of former AK Steel Ashland Works property along the Ohio River to construct a data center double the size of the next-largest planned Kentucky site, also near Ashland.
Steel manufacturing once anchored Ashland and the surrounding Northeast Kentucky region to the industrial Midwest, but the area has devolved into an economic island over the past three decades as major firms like AK Steel pack up and chase cheaper wages overseas. Local leaders are starting to market the area’s industrial wastelands as assets in the data center brokerage game.
But as interest from developers grows, so too has public skepticism.
Residents have raised concerns over the enormous facilities’ electricity and water demands, noise, environmental impacts and the prospect of generous incentives for projects that promise relatively few permanent jobs. It’s set the stage for a debate over what kind of economic development should shape the region’s next chapter.
In May, Bitcoin mining firm TeraWulf Inc. said it plans to construct a 1-gigawatt data center campus at an abandoned strip mine-turned industrial park in rural Boyd County west of Ashland. That proposal, large enough to power a city the size of San Francisco, was by far Kentucky’s largest.
Now, Rubix says it intends to double that capacity just a few miles away, according to a list of questions the company fielded from city leaders in Russell. Mayor Samuel Simpson said he was approached in June by a consulting firm interested in how a temporary data center moratorium the city council had passed just a few days earlier would impact a project under development at the former steel mill site.
“This is the first I became aware that the property was under contract,” Simpson wrote in an open letter to the community last week.
Now, the city is under pressure to lift that moratorium so Rubix can complete its site work before its option to purchase the property expires, Simpson told the Herald-Leader Wednesday. City hall has been fielding calls from members of the community who are concerned about a data center so close to their downtown core, but the city council is leaning toward lifting the ban at least to allow this exploratory phase to proceed, he said.
“This is generation-changing here,” Simpson said. “We had a steel mill sitting up there since the ‘20s that was a very important part of the manufacturing revolution that came about. They employed over 5,000 people here in our communities, and that meant a lot.”
The former AK Steel site is owned by Cleveland-Cliffs Inc., a steel manufacturer that operates an automotive tooling and stamping facility in Bowling Green. The Ashland Works property is inactive.
“It’s sitting empty now,” Simpson said. “We have one employee sitting up there, and it’s a security guard.”
The mayor said representatives from the consulting firm told him that the former steel mill site was an ideal location for a data center because it is a legacy industrial property already surrounded by active heavy industry. But he insists he’s keeping an open mind. Even if the city council does lift the moratorium, that doesn’t greenlight the data center to begin construction.
“This does not eliminate the need to address noise, infrastructure, traffic, emergency services, utility impacts and community concerns,” Simpson said.
At full build-out the consulting company said, the data center construction project could deliver more than 1,000 craftsman jobs over four years, and roughly 200 long-term high-paying jobs with an estimated annual payroll of about $25 million. The city and other local taxing jurisdictions could rake in $40 million in annual property taxes.
Rubix responded to a list of 150 pointed questions the city asked about the proposal this month. Based on its responses, the company said it does not believe the data center campus will impact residential electricity rates. The campus would use up to 150,000 gallons of water per day at full, 2-gigawatt capacity. Most of that water would be non-potable, likely drawn directly from the Ohio River, as no wells will be drilled, the company said.
The campus intends to use a closed-loop water cooling system and “maximize recirculation consistent with water quality, reliability, public health, and equipment requirements,” it said in its responses. Cooling water discharge would not be drained into the municipal sewer.
The site is served by Kentucky Power, an investor-owned subsidiary of American Electric Power Inc. Experts say the Eastern Kentucky power supplier already faces supply shortages, like many utilities in the PJM Interconnection regional transmission organization.
The PJM service territory is under immense pressure to increase deliverable power across a 13-state region from Pennsylvania to Virginia and as far west as Eastern Kentucky. States like Virginia are leading the nation in active data center construction and energy use, creating a trickle-down effect on consumer-level usage. At the latest service territory auction, PJM utilities added $6.3 billion in new costs to households and businesses, driven almost entirely by data centers, according to the power grid operator.
Under the Russell data center moratorium, projects will be halted for 180 days while the city and county evaluate potential projects and collect information about data center development. The city went so far as to retain an attorney to provide a legal review of potential data centers in the area, the mayor said.
“Our intent was to collect information and educate ourselves during this moratorium period so that we would be able to provide answers to our citizens,” Simpson said.
