Decatur weighs new TVA data center rates
The Decatur City Council is considering an amendment to Decatur Utilities’ agreement with the Tennessee Valley Authority to implement new data center electricity rates. TVA’s rate structure increases charges for data centers and adds capacity fees intended to prevent residential customers from bearing the cost of their growing power demand.
The Decatur City Council is expected to consider an amendment to Decatur Utilities’ TVA agreement that would adopt new wholesale rate classes and capacity charges for data centers. TVA approved the structure in August, with rate increases phased in through fiscal 2029 and average data center electricity bills expected to rise about 10% over three years. TVA says the changes will recover the costs of serving large power users and protect other customers from subsidizing them.
The discussion comes as Decatur and other north Alabama communities prepare for potential data center growth. Residents raised concerns about future grid and water infrastructure costs, while Mayor Kent Lawrence and Councilman Barry Bullard said the new rates should require data centers to cover their own power-related expenses. Decatur separately amended its zoning ordinance to limit data centers to industrial districts and require a special exception and public hearing, although no developer has contacted city officials about a project.