(LEX NEWS) — A new report from an independent state agency examines Kentucky's emerging energy challenges with data centers at the center of the conversation — and the concern over rising electric bills for everyday Kentuckians.

The Kentucky Energy Planning and Inventory Commission, known as EPIC, released the report on Thursday. One of the central questions it addresses is whether or not data centers will raise electric bills.

According to EPIC, the answer depends on whether the right rules are in place before a project is built.

"Data centers are neither automatically good nor automatically bad. The key is asking the right questions before your community makes any commitments," the commission wrote in supplemental documents.

EPIC reviewed what happened in other states to help answer some of those questions.

Eric King, the commission's executive director, said their goal was to present Kentucky with information.

"Really shine a light on facts. That's what we're presenting," King said. "We're not speculating. We're saying what happened and why did it happen? And what can we learn from this?"

Higher electric bills are among the top concerns raised by communities facing data center development nearby — and according to the report, that concern is valid.

EPIC's information explains that when a utility builds a new substation, power lines, or generating capacity to serve a data center, those costs must be recovered from someone. Without strong rules in place, those costs get spread across every home, farm, and business on the system.

Virginia serves as a cautionary example. EPIC's documents say Virginia did not have adequate cost-protection rules when its data center boom began, resulting in projected residential electric bill increases of $14 to $37 per month by 2040.

Kentucky currently has no law protecting ratepayers from footing the bill for data centers, but Senate Republican leaders say they want to ensure regular people are not paying for the power that data centers use.

"Another important point about that is transmission," said Sen. Stephen West. "It's going to be important that the ratepayers don't bare the cost of transmission as well."

Lawmakers say they are balancing those protections against the economic development that data centers bring.

EPIC says Kentucky is well positioned to attract data center investment, pointing to low industrial electricity rates, available land, water resources, and growing fiber infrastructure. The critical challenge, the commission says, is ensuring that development protects existing ratepayers while also maintaining grid reliability.

Lawmakers believe that challenge can be met.

"We don't want to push away economic development. It can coexist together," said Sen. Robby Mills. "How do we do this best for Kentucky and the residents?"