On July 21, the Nashville Metropolitan Council approved a new regulatory framework for data centers, along with companion building requirements and a temporary permitting moratorium. The ordinances replace previous zoning rules, which treated these massive, energy-intensive facilities much like ordinary office spaces. SACE is calling on Metro Council to strengthen the regulations before the moratorium expires — closing the onsite-generation loophole, requiring binding capacity certification, and preventing infrastructure costs from being shifted onto other communities.
Key Takeaways
- The ordinance requires a 15% renewable energy minimum, closed-loop cooling, noise standards, and restricts routine use of onsite generators — solid first steps, but conservative compared to what other jurisdictions are proposing.
- There’s no cap on how much emissions-producing backup generation a data center can install, creating a loophole where “backup” fleets could operate largely unchecked.
- Capacity confirmation is only required at the zoning-permit stage, not tied to a binding check before final occupancy — meaning a facility could open before the grid can actually serve it, as happened with xAI’s Memphis facility.
- TVA has received requests for 11,000 megawatts of new demand from artificial intelligence, cryptocurrency, and data center projects — nearly a third of its entire system — driving one of the largest methane gas buildouts in the utility’s history and the extension of aging coal plants past their planned retirement dates.
- Local approvals have regional consequences: the tax revenue and jobs may stay in one county, while the power plants, pipelines, transmission lines, and pollution land in another, as Cheatham County recently experienced.
Much of the public debate surrounding this issue has centered on siting: which neighborhoods should host data centers, how far they should be located from homes and other sensitive areas, and whether they’re compatible with Nashville’s land-use priorities. These are legitimate concerns. Communities deserve meaningful protections from industrial noise, water consumption, generator pollution, land-use conflicts and other direct impacts. The new zoning regulations deliver on this.
Metro Council’s new data center ordinances are an important first step. But the conversation can’t stop at the property line.
Nashville’s Data Center Regulations
The new zoning ordinance is a first step at addressing these issues. It recognizes data centers as a distinct land use and classifies them according to their physical size and maximum electricity demand. The ordinance limits medium and large data centers to industrial districts and prohibits data center campuses exceeding 500,000 square feet or 100 megawatts in Davidson County.
The ordinance also requires developers to provide information about water consumption, electricity demand, noise, lighting, transmission needs, and emergency operations. It requires closed-loop cooling, establishes noise standards, restricts the routine use of emissions-producing generators, and requires annual compliance reporting.
Developers must submit an energy consumption and sustainability plan that includes projected operational load, peak electricity demand, strategies to reduce strain on local power infrastructure, and alternatives that could minimize the need for additional transmission lines. The ordinance also requires renewable energy equal to at least 15% of total power use, with off-site resources required to be additive to the TVA system.
For too long, communities have been asked to accept vague promises about technological progress and economic development without receiving clear information about the infrastructure, pollution, and public costs associated with extraordinarily energy-intensive projects.
Nashville’s ordinance begins to shift that burden back where it belongs: onto the developers seeking permission to build and operate these facilities.
But the framework still leaves critical energy questions unanswered. The temporary moratorium gives the Metro Council time to close these gaps before permit applications are filed or move forward. There’s no reason to rush past that opportunity.
Nashville’s Climate Goals Need to be Prioritized
Nashville’s approach to regulating data centers should align with the city’s existing renewable energy and sustainability commitments. Metro’s renewable portfolio standard requires government operations to reach 100% Tier 1 renewable energy by 2041. The city also has a community-wide greenhouse gas emissions reduction target. These standards reflect a broader commitment to cleaner energy, lower emissions and responsible resource use. Those same values should inform how Nashville regulates some of the largest new electricity consumers seeking permission to operate within the city. We should not only be asking whether a data center is appropriately located, but also whether its electricity needs can be met without driving more methane gas generation, prolonging aging coal plants or shifting pollution and infrastructure burdens onto communities elsewhere in the Tennessee Valley. These are the questions that can tell us whether a data center can be consistent with the city’s stated goals.
Data center developers are known to be reckless in their pursuit of bringing their facilities online as quickly as possible, often without heeding concerns from the impacted community. The developers and tech companies driving the current data center boom are the only ones who benefit from moving too fast. Passing strict regulations with substantial safeguards is the best line of defense for Nashville.
Nashville Needs a Firm Cap on On-Site Fossil Generation
The new zoning ordinance currently limits emissions-producing on-site generation to testing, commissioning, backup, and defined emergency use. It also establishes testing restrictions and requires generator logs. Those protections matter, especially after communities elsewhere have seen data center developers install large fleets of methane gas turbines with limited public review.
But Nashville’s framework doesn’t cap how much emissions-producing generation may be installed at a data center. That isn’t a minor omission. A facility could potentially install dozens of generators or turbines while continuing to characterize them as backup equipment. Even when routine operation is prohibited on paper, a large on-site combustion fleet creates serious enforcement challenges, increases local air-pollution risks, and leaves fossil-fuel infrastructure in place that could later be used more extensively.
Metro Council should establish a firm aggregate limit on emissions-producing on-site generation. Reliability needs above that limit should be addressed through battery storage, renewable energy, energy efficiency, load reduction, and other noncombustion technologies.
A data center shouldn’t receive final approval unless the public electric system can serve it, and it shouldn’t be allowed to compensate for unavailable capacity by constructing its own fossil-fueled power plant.
Fifteen Percent Renewable Energy is a Beginning
The ordinance’s 15% renewable energy requirement is another important provision, but 15% should be viewed as a floor, not the finish line.
Other jurisdictions grappling with the same onsite-generation question are already going further. The community in Pennsylvania’s Lycoming County proposed that 50 to 80 percent of unused roof space be dedicated to solar arrays and that battery storage equal 50 to 100 percent of total onsite backup needs wherever a data center co-locates its own generation.
Nashville’s ordinance doesn’t need to mirror this exactly, but it shows that a 15% renewable minimum sits at the conservative end of what’s being proposed elsewhere, not the leading edge.
Facilities with exceptionally large, continuous electricity demand should be expected to support substantial additions of renewable energy and battery storage, while also committing to energy efficiency and demand flexibility. They should also demonstrate that their operations won’t increase reliance on methane gas or shift infrastructure costs and reliability risks onto existing customers.
Nashville Has an Opportunity to Learn From Our Neighbors in Memphis
Nashville’s new data center regulations requires developers to provide written confirmation that Nashville Electric Service has reviewed the proposal when applying for a zoning permit, “has or will have” capacity to serve it, and has agreed to provide electric service once applicable charges and fees are paid. That’s a valuable initial screening requirement, but it isn’t enough. There’s an enormous difference between confirming that capacity exists and stating that capacity may become available at some undefined point in the future. Large data centers can take years to build. During that time, generation availability, transmission conditions, construction schedules, project designs, and electricity forecasts can all change substantially between initial zoning approval and the date a facility is ready to operate. A preliminary capacity assurance shouldn’t become a permanent entitlement to electricity that doesn’t exist. As written, the ordinance requires capacity confirmation during the zoning-permit process, but it doesn’t create a second, binding certification tied to the issuance of the final occupancy permit. Metro Council must close that gap.
Memphis residents’ experience with xAI’s supercomputer complex in South Memphis shows why this is so important. The xAI data center began operating with on-site methane gas turbines before the electric infrastructure needed to serve its full planned load was complete. Even after the facility secured substantial grid power, turbines remained in use while additional electric infrastructure was being developed. The facility began operating before sufficient grid infrastructure was available, and on-site methane gas generation was used to fill the gap.
Nashville absolutely cannot allow that sequence to be repeated. Nashville’s new ordinance’s restrictions on primary and routine on-site generation are important, but they must be paired with an explicit final-occupancy requirement. Otherwise, a developer could argue that methane gas turbines are only temporary, transitional, necessary for commissioning or needed while it waits for a substation, transmission upgrade or additional grid capacity.
We recently learned in Cheatham County, Tennessee what can happen when growing regional electricity demand becomes the justification for major new fossil-fuel infrastructure. When TVA proposed building a 900-megawatt methane gas combustion facility on rural land in Cheatham County, sustained community opposition resulted. Cheatham County residents were forced into a prolonged fight to protect their homes, land, water and quality of life from a project that offered their community little meaningful benefit.
Cheatham County’s experience is a warning against approving the electricity demand first and deciding later where the infrastructure needed to serve it will be built. Once a project has been approved and service is promised, the pressure to produce the electricity can overtake sensible planning and meaningful public engagement.
That’s why local governments must think beyond their borders. The question isn’t simply whether a data center fits on a particular parcel. It’s whether the electricity exists, what resources will supply it, what infrastructure will be required, and which communities may be forced to bear the environmental and economic consequences. A private developer’s preferred construction schedule doesn’t eliminate the need to answer these questions. It makes answering them before approval even more important.
If sufficient electricity capacity doesn’t exist when construction is complete, Metro shouldn’t issue the permit allowing the facility to operate. Data centers shouldn’t be allowed to open at partial load, receive an indefinite temporary approval, or depend on a massive fleet of on-site generators while waiting for the public power system to catch up.
Metro must also make clear that temporary occupancy permits, phased openings, commissioning periods, and partial-load operations can’t be used to evade this requirement. Lack of grid capacity, construction delays, or incomplete electric infrastructure must never qualify as an emergency allowing a data center to operate on methane gas turbines. Emergency generation should be reserved for genuine, unexpected interruptions of established electric service, not used to begin operations before that service exists.
Developers must already satisfy building, fire, water, sewer, and safety requirements before receiving final occupancy approval. Demonstrating that the electricity needed to operate one of the largest loads on the system is actually available should be treated with the same seriousness.
TVA is Facing Unprecedented Requests for Electricity
The Southeast is experiencing record electricity demand, largely driven by the unprecedented rate of data center development. As a result, the Tennessee Valley Authority is pursuing one of the largest expansions of methane gas power plants of any utility in the nation.
The scale of the demand facing the Tennessee Valley is difficult to overstate.
In a public interview, then-TVA Senior Vice President John Bradley said the utility had received 11,000 megawatts of requests from artificial intelligence, data center and cryptocurrency projects alone. Eleven thousand megawatts is nearly one-third of TVA’s existing 34,000-megawatt system.
TVA described that volume as unprecedented. TVA leadership also acknowledged that data centers can scale their demand much faster than utilities can build the generation and transmission infrastructure needed to serve them.
So where will all that new energy come from? Data centers are promoted as symbols of innovation. Their energy practices should reflect that claim. A truly modern data center shouldn’t depend on outdated fossil-fuel infrastructure when cleaner, quieter, and more resilient alternatives are available. Instead, TVA’s response to rising electricity demand already includes one of the largest methane gas construction programs in its history.
TVA already operates 101 methane gas- and fuel oil-fired generators at 17 sites, with a combined capacity of more than 12,000 megawatts. TVA says those gas plants generated more electricity in 2025 than ever before.
TVA is also adding approximately 3,700 megawatts of additional methane gas generation: about 1,450 megawatts at Cumberland, 1,550 megawatts at Kingston, 200 megawatts at Allen and 500 megawatts at New Caledonia.
Approving thousands of megawatts of additional speculative load before determining whether the capacity exists risks accelerating that buildout. Whether the data centers are built or not, customers are stuck with the bill and the pollution for decades to come.
New Data Center Demand Can Prolong Coal Plants and Their Toxic Legacy
In February 2026, TVA’s Board of Directors authorized the extension of the Kingston and Cumberland coal plants beyond their scheduled retirement dates, citing rising electricity demand and federal support for continued coal generation. Those retirement decisions weren’t arbitrary. TVA’s own 2021 Aging Coal Fleet Evaluation found “substantial performance and cost risk” in operating coal plants nearing the end of their useful lives. It described TVA’s coal plants as among the oldest in the nation and found that the fleet ranked in the bottom quartile among regional peers for availability. TVA Coal Operations Vice President Kris Edmondson was equally clear, “…the continued long-term operation of our coal assets, including Kingston, is contributing to environmental, economic, and reliability risks.”
Those facts haven’t changed.
Rising data center demand can’t reverse decades of deterioration, or make aging coal plants cleaner, cheaper, or more reliable. Instead, it risks creating a dangerous cycle — projected electricity needs are used to justify keeping aging coal plants online, while the continued availability of those plants makes it easier to approve even more demand.
TVA had planned to retire Cumberland’s units by the end of 2026 and 2028, and Kingston’s nine units by the end of 2027. Those decisions reflected the age, condition and declining performance of a coal fleet TVA itself described as creating environmental, economic and reliability risks. Kingston’s units began operating in 1954 and 1955. Cumberland’s two units entered commercial operation in 1973.
Keeping coal plants operating also produces more coal ash — a toxic waste that can contain arsenic, mercury, cadmium, chromium, and other harmful contaminants. Coal ash can pollute groundwater, drinking water, rivers, and air, and it remains long after a plant closes.
Capacity Certification is Regional Accountability
Once a major project is approved, enormous pressure can build to produce the promised electricity by almost any available means. In the Tennessee Valley, that could mean another methane gas plant, more pipelines, new transmission corridors or prolonged operation of aging coal facilities.
Capacity certification forces decision-makers to confront those consequences before a data center begins operating, not after its demand has already been used to justify new fossil-fuel investments. Meaningful capacity certification isn’t merely a technical utility document. It’s a form of regional accountability. Credible certification should identify the facility’s full requested load, whether existing capacity can serve it, what additional infrastructure is required, when that infrastructure will be completed, and who will pay for it.
It should also reveal the broader consequences: whether the project will require new generation, pipelines, transmission, or substations; increase reliance on methane gas; prolong coal plant operations; and shift pollution, land loss and other impacts onto surrounding communities.
Without that information, Metro risks approving the electricity demand first and leaving TVA to determine later where and how it will be supplied.
The burden should be on developers to demonstrate that their project can be responsibly served, not on communities to fight the consequences after approval has been granted.
This Ordinance is the Beginning, Not the Endpoint, for Nashville
Metro Council deserves credit for listening to residents’ concerns about approving data centers under rules that were never designed for facilities of this scale, but approving data center regulations and a temporary permitting moratorium in the same meeting raises an obvious question: If Nashville was willing to pause applications, why rush to enact the ordinance before safeguards were put in place?
The good news is that Metro Council still has an opportunity to correct the ordinance before the moratorium expires. Metro Council should use this time to strengthen the ordinance to require:
- binding verification that sufficient electricity capacity exists as a condition of final occupancy;
- a date-certain commitment that the facility’s full approved load can be served before operations begin;
- completion of all required electric infrastructure before occupancy;
- a firm aggregate cap on emissions-producing on-site generation;
- greater reliance on renewable energy, battery storage, efficiency and noncombustion reliability resources;
- protections preventing infrastructure costs from being shifted onto existing customers;
- transparent reporting with enforceable consequences for violations.
These aren’t abstract policy preferences. They address foreseeable loopholes that could allow data centers to begin operating without sufficient grid capacity.
There’s no need to speculate about these risks. Memphis has already demonstrated what can happen when a data center begins operating before the electric system is prepared to serve it. Cheatham County has already experienced how rising regional demand can be used to justify a massive new methane gas plant, pipelines, and transmission infrastructure in a community that receives little of the promised economic benefit.
We urge Nashville residents and communities throughout the Tennessee Valley to join SACE in calling on Metro Council to amend the ordinance before the moratorium expires. Nashville still has an opportunity to establish a responsible model for data center development — one that protects communities, supports the city’s clean energy commitments, and refuses to shift the consequences of its growth onto someone else.
