Elon Musk's xAI, pollution and data centers — what you need to know about a Tennessee bill

Tennessee lawmakers are addressing the rapid growth of data centers and their impact on electricity costs and infrastructure. State Rep. Ed Butler sponsored HB1847/SB2128, a bill designed to prevent residents from subsidizing data centers by allowing these facilities to generate their own power, independent of state utilities. Critics, such as Trey Bussey, an attorney with the Southern Environmental Law Center, warn that the bill could lead to an unregulated influx of methane gas plants across Tennessee, significantly increasing air pollution. The legislation would allow data centers requiring at least 50 megawatts to produce "behind-the-meter" power or purchase from independent producers without oversight from the Tennessee Public Utility Commission, effectively deregulating a segment of the power market. Elon Musk's xAI facility in Memphis is cited as a key example. Its first "Colossus 1" facility initially operated with 30 mini gas turbines without proper permits, and a second facility in Mississippi will add 40 more. These operations, and future planned facilities requiring up to 2 gigawatts of power, could drastically increase air pollution in West Tennessee and North Mississippi by burning methane. The Tennessee Valley Authority (TVA), which supplies power to most of Tennessee and parts of six other states, noted that data centers comprised about 10% of its total load in 2025, with demand expected to double by 2030. TVA has increased rates and extended the life of coal plants to meet growing demand, and is exploring options to protect customers from subsidizing large industrial loads. The bill is scheduled for a hearing before the Tennessee Senate Commerce and Labor Committee.