Households in the Tennessee Valley will not be the ones footing the bill for AI’s appetite. The Tennessee Valley Authority board on August 20 approved a wholesale rate class built specifically for data centers, alongside a new Integrated Resource Plan and a fiscal 2027 budget with more than $13B in planned generation and transmission spending.
From October 1, data center loads above 5 megawatts, new or expanding, face a Capacity Commitment Charge tied to TVA’s data center rate schedules. Instead of folding those costs into the general rate base, the fee makes the big users who trigger them pay for the extra capacity.
Chair Mitch Graves said the board is making sure families and small businesses are not left carrying the cost as AI and advanced industries consume more electricity.
The package also introduces a Power Interruption Provision for data centers that want to come online before the generation serving them exists, aimed at interconnection-queue pressure across the Southeast. Contract-demand rules tightened so customers sit in rate classes matching actual usage, and policy for new loads above 100 megawatts was updated.
The resource plan sees the Valley needing 11 to 32 gigawatts of extra generation by 2040, including up to 26 gigawatts of natural gas and 5 gigawatts of nuclear. TVA has 4,120 megawatts under construction and 3,000 more under evaluation.
