TVA approves new electricity rate for data centers
The Tennessee Valley Authority (TVA) has passed a new electricity rate for data centers, effective October 2026, which will be phased in over three years. This decision, made at a board meeting in Memphis, Tennessee, is part of the utility's Integrated Resource Plan that focuses on fossil fuels, drawing criticism from environmental groups. The rate change is intended to accommodate anticipated growth in electric load from data centers while balancing costs for customers.
The Tennessee Valley Authority (TVA) board, at its latest quarterly meeting in Memphis, Tennessee, approved a new electricity rate specifically for data centers. This rate change, part of TVA's Integrated Resource Plan extending through 2050, is set to go into effect on October 1, 2026, and will be phased in at approximately 10% over three years.
The plan has sparked significant contention from environmental groups across the Tennessee Valley, including the Southern Alliance for Clean Energy (SACE). Critics highlight the plan's reduced investment in solar and complete elimination of planned wind energy, instead prioritizing coal, gas, and nuclear power. TVA spokesperson Scott Brooks indicated the utility aims to balance economic development, including welcoming data centers, with maintaining affordable power bills for its customers.
TVA anticipates its electric load to grow substantially, ranging from 9 to 33 gigawatts by 2040, with data centers reportedly comprising 10% of last year's load. To meet this projected demand, TVA is delaying the closure of existing coal plants and investing in new gas facilities, such as one in Cheatham County. However, Stephen Smith, executive director of SACE, argues that these decisions prolong reliance on fossil fuels and could still transfer costs to consumers, questioning the specifics of how these data center-related costs will be determined and applied.