Kansas’ public utilities commission, the Kansas Corporation Commission (KCC), has approved new energy regulations to support data center growth while protecting existing ratepayers.

The new tariff will provide large-load facilities with lower energy rates and other incentives in exchange for bearing a portion of the grid costs required to support the increasing data center load.

In addition, large load users that require 75MW or more will have to sign an energy contract for between 12 and 17 years with high early termination fees. In exchange, large-load users will receive long-term, stable rates at a competitive price. Large load users will be offered further deals if they help generate their own power or pay to construct clean energy projects.

Kansas-based electrical utility Evergy said the new rules will allow it to recover the costs of new power lines, transformers, substations, and power generation assets.

"This is a good deal. It protects customers, but also importantly, it provides a pathway for economic development," KCC chair Andrew French said during the vote.

The tariff plan was originally agreed upon earlier this year by Evergy and more than a dozen companies, advocacy groups, and stakeholders, including Google, Spirit AeroSystems, several Kansas City metro schools, and the environmental pressure group Sierra Club.

Kansas is a growing data center hub, with DataCenterMap listing 19 operational data centers in the state, with the bulk in and around Kansas City.

Kansas joins several other states in proposing new rate classes for data centers to shield ratepayers from bearing the cost of new transmission and power generation.

In July, the Public Utilities Commission of Ohio (PUCO), with the support of state utility American Electric Power (AEP), approved a new large load tariff that will require new data center customers in Ohio to pay for a portion of their energy requests, even if they use less, to cover the cost of the infrastructure required to bring electricity to those facilities. AEP introduced the new rate class to shield other ratepayers from bearing the costs of large data centers, which are proliferating across the state.

Before this, the Oregon legislature passed a bill to ensure that data centers and cryptocurrency operations cover a fair share of the costs associated with new power plants and transmission lines.

Most recently, Dominion Energy proposed a new rate class for data centers. The proposal would apply to utility customers who consume more than 25MW of energy and have a monthly load factor of more than 75 percent. This will result in many, if not most, of the approximately 450 data centers within its coverage zone being classified in the new customer class.