Report: Tennesseans living near data centers see spikes in electricity costs
A report by Think Tennessee highlights that residents near data centers in Tennessee, particularly Nashville, face increased electricity costs while commercial consumers see decreases. Significant local opposition is emerging against proposed data centers, with new zoning regulations and a data center moratorium currently under consideration by the Metro Council. Nashville Mayor Freddie O’Connell is backing these legislative efforts, including a bill to condemn property near the Nashville Zoo for potential purchase by Metro.
A recent report by the nonpartisan think tank Think Tennessee reveals that residents living near data centers in Tennessee have experienced an average 3.2-percent increase in electricity bills between 2023 and 2024. In contrast, commercial consumers, including data centers, saw a 0.2-percent decrease in their bills during the same period. The report, the first in a two-part series, also projects that regional households will face a 5.1-percent price increase between 2022 and 2027, despite commercial consumers being projected to consume energy at twice the rate of residents.
The analysis indicates that Tennessee's land availability, energy sources, and growing technology sector are disproportionately attracting data center developers, with over 60 data centers statewide and 13 existing or under construction in Nashville alone. This growth has contributed to a sevenfold increase in data center electricity consumption in the Tennessee Valley region over five years, reaching more than 9.2 million megawatts in 2025. This demand is equivalent to powering 1.3 million Tennessee homes annually, raising concerns about grid strain and reliability, especially after Nashville Electric Service (NES) experienced widespread outages and up to $140 million in damages during a January ice storm.
Local opposition to data centers is mounting, fueled by proposed facilities near the Nashville Zoo and Fisk University. During a June public hearing, 150 residents voiced concerns about new data center zoning regulations. District 20 resident Santiago, for example, highlighted the strain on the local power grid. The debate is set to continue as the Metro Council holds public hearings on Tuesday for new zoning regulations and a proposed data center moratorium. Nashville Mayor Freddie O’Connell supports these measures and has filed legislation to initiate the process of condemning property adjacent to the Nashville Zoo, allowing Metro to acquire it at fair market value. Think Tennessee's president, Erin Hafkenschiel, stressed the critical need for policy and legislation to manage data center growth, warning that improper planning could shift the economic burdens onto households.