Tennessee Valley Authority Changes Rates to Support Data Centers

by: Elisheva Wimberly

Posted: Aug 21, 2026 / 06:06 AM EDT

Updated: Aug 21, 2026 / 06:06 AM EDT

NASHVILLE, Tenn. (WKRN) — The Tennessee Valley Authority Board is changing its power rates, and its main target for the change involves data centers.

With data centers popping up all across the region, the TVA said these new rates will support the future of artificial intelligence, along with protecting their daily customers.

TVA leaders claim the existing rate structure does not fully account for the cost of risk and operation requirements for serving these data centers.

They believe a new data center rate change will help grow private data center development and that it won't raise costs for households and businesses.

TVA Executive Vice President and Chief Financial Officer Tom Rice said the new data center rates align with the current federal administrations Ratepayer Protection Pledge, which was signed in July. The pledge assures that despite the major surge in electricity demand from AI data centers, it will not cause higher utility bills for American households or businesses.

The TVA worked with local power companies to get feedback. And the new billing rate will be about 10% more of what they pay right now.

However, concerns are sparking over how the TVA plans to hold companies accountable for the new rates. The Southern Alliance for Clean Energy is calling for more transparency around the new rate structure to make sure it's enough for data centers to pay their share.

But with data centers growing rapidly in the valley, TVA leaders said it's a much-needed change.

Any data center companies interested in bringing their own energy solutions to TVA will also be considered.

The new data center rate change will take effect on Oct. 1.