The Tennessee Valley Authority changed the way it charges data centers for electricity this week, but the utility did not show its math on how it will protect people from higher bills.
During a two-hour meeting organized on PowerPoint, a TVA official showed a single slide about the rate change to the TVA Board, the utility’s regulator. The only information provided to the public was that the new rate will cost data centers about 10% more than they would have paid, and TVA is adding an additional charge for loads over 5 megawatts.
The board, which has a majority of members appointed by President Donald Trump, voted in favor without any questions.
The decision will have financial repercussions for the region. TVA generates electricity that serves 10 million people across seven states, and that is distributed by local power companies like the Nashville Electric Service and Memphis, Light, Gas and Water.
Within minutes, the board also advanced a plan for TVA to drastically grow its energy supply to meet forecasted demand, which is driven primarily by data centers. That plan may allow the utility to double or even triple its current capacity from fossil gas infrastructure, which will have serious consequences for public health.
“Data centers must pay their fair share, but that doesn’t mean they should be allowed to pollute our communities with the burden of more gas and coal emissions to power their operations,” Leah McCord, a coordinator with environmental group Appalachian Voices, said in a statement.
Developers of data centers make a lot of money with their facilities. Elon Musk’s xAI, a data center campus that has at least 2 gigawatts of power, leased about 15% of its computing power to Anthropic for $15 billion per year through 2029. In return, data center developers could support the communities they reside in by investing in renewable energy and battery storage to meet their energy demand to help maintain air and water quality, McCord said, as well as avoid planet-warming emissions.
Companies like Meta have projects that use 100% renewable energy, but xAI largely uses gas turbines to cover its energy consumption that make it one of the most polluting facilities in the Tennessee Valley region.
TVA is planning to spend billions of dollars on its infrastructure expansion over the next three years to support data centers, and it’s keeping coal online — going back on promises to soon retire its four remaining coal plants — which will require significant investments to upgrade. TVA also indicated that data center owners could “bring their own innovative supply and generation resources,” likely referring to companies like xAI using behind-the-meter generation.
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