TVA considering rate changes due to data centers

As discussions of data centers that require high power loads continue to develop, the Tennessee Valley Authority is considering changing its rates in a way to accommodate the growing demands without placing undue cost increases on residents.
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In May, 2026, the TVA shared a letter with 6 News that it sent to local power companies in February to begin the rate-changing process. The utility provider explained that it has continued to have frequent discussions with those local power companies and other customers about the proposed changes, and the TVA will be proposing actions for implementation to its board of directors in August at the earliest.
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TVA spokesperson Scott Brooks explained that in the last year, data centers made up around 18% of the TVA’s overall industrial load, and that number is expected to double by the year 2030.
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if it approved all of the data centers interested in coming to East Tennessee, there would be an increased power demand of 11,000 megawatts.
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According to KUB’s website, there are currently three data centers in its service area that have a range of energy usage. The largest of those data centers is contracted to use up to 73 megawatts of power...

From my research,
73 megawatts powers approximately 45,000 homes

11,000 megawatts powers approximately 5-6 million homes in the South or nearly 10 million in the Northeast

More needs to be done to rein in power consumption by these new "data centers." Then there is the noise problem and possible air pollution and water usage issues. Are they even that necessary?

Alcoa Electric raised the residential "customer charge" last fall, 2025, by 11.3%.

Now, last fall, the Alcoa Electric Department wants to add to the “energy charge” portion of our bill, Demand Cost Recovery Adjustment.

Alcoa Electric has been around for nearly 70 years. Demand charges have been handled within existing charges to residential customers. From what I was told, demand charges are when TVA charges extra for high usage. High usage times are fairly rare in Alcoa. We might have several days in the winter where it gets really cold or really hot (not sure there were any days in 2025). From what I have been told, Alcoa Electric does not pass on the cost incurred for high demand, and Alcoa Electric has not been hurt financially.

Alcoa Electric thinks this is the time to start adding Demand Cost Recovery Adjustments to our electric bills. In the past 4-5 years, our electric bill has increased by 21.7%, our water/sewer bill by 46.9%, our city property taxes by 24.2%, our homeowners insurance by 52.7%, ground beef up by 55.7%, mayonnaise up by 75.2%, mushroom soup up by 59.2%, etc. You can see comments on the Alcoa Electric Facebook page as to how residents feel about these increased charges.

KUB does not have this charge. Maryville Electric does not have this charge.

Greeneville, TN does have this charge. I'm not exactly sure why, However, it would appear their energy charge is less than Alcoa Electric and adding the Greeneville DCRA rate to the Greeneville energy rate appears to still be less than Alcoa Electric energy charge.

Why does Alcoa Electric feel now is the time? Are they hurting for money with the growth being pushed by the city?

A close friend has been without power since Sunday morning.

Nashville Electric still shows 105,000 without power.

Officials are "raising questions about preparedness" of Nashville Electric.

Besides no power in the area, tree limbs knocked the electrical service panel off the friend's house. The electrician won't come to their neighborhood because of dangerous roads. This is suburban Nashville, not the boonies.

Three Democratic US senators announced on Tuesday that they are investigating whether big tech companies are passing the soaring utility costs of “energy-guzzling” data centers on to ordinary Americans.

...they were alarmed by reports that these data centers caused residential electricity bills to “skyrocket”. Regions with significant data center activity have already endured price increases by as much as 267% over the past five years, the three lawmakers wrote. According to the Energy Information Administration, a federal agency, the average cost of a US family’s electricity bill had risen 7% year-over-year as of September.
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They also inquired about the tax deductions or other financial incentives these companies received from state and local governments, as well as payments they made to lobbyists and consultants to advocate for the construction of data centers. They requested a response no later than 12 January.
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A Cornell study published last month in Nature Sustainability found that data centers could annually consume as much water as 6 million-10 million Americans and emit as much carbon dioxide as 5m-10m cars.

The scrutiny arrives when 70% of US households have seen their electricity costs rise over the past year, with many blaming it on the energy-demands from AI, according to a recent survey. In some cases, local residents have been protesting incoming AI data centers over the environmental impact, potential pollution, and land seizure attempts.

This generally obscure topic [electricity costs] has become critical in New Jersey because electricity rates this summer climbed 22 percent from a year earlier — faster than all but one state: Maine.

Electricity prices are rising, not only in New Jersey but across PJM and throughout the rest of the United States, because demand is outpacing supply...

The cost for long-overdue improvements to power systems and upgrades needed to support energy-hungry data centers are also driving up household electric bills.

With the explosive growth of Big Tech’s data centers threatening to overload U.S. electricity grids, policymakers are taking a hard look at a tough-love solution: bumping the energy-hungry data centers off grids during power emergencies.
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Grid operators in Texas, the Great Plains states and the mid-Atlantic region have produced eye-popping projections showing that electricity demand in the coming years will spike, largely due to data centers.
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The proposals are cropping up at a time when electricity bills nationally are rising fast — twice the rate of inflation, according to federal data — and growing evidence suggests that the bills of some regular Americans are rising to subsidize the gargantuan energy needs of Big Tech.
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“Data center load has the potential to overwhelm the grid, and I think it is on its way to doing that,” said Joe Bowring, who heads Monitoring Analytics, the independent market watchdog in the mid-Atlantic grid.

70% of rising electricity cost from data centers
Tennessee in top 10 states with electricity rate increases

Our government representatives are not doing a good of representing/protecting citizens. Be more informed when it comes time to vote.

Why?

The AI explosion means millions are paying more for electricity.

The data centers required for Big Tech are driving up electricity demand — and prices.

Are data centers the reason for Tennessee be in the top 10 states with electricity rate increases? The article doesn't say, but we should get answers. The residents of Tennessee should not have to finance these data centers.

TVA is increasing rates for electricity for a second time in 2024. First, there was "a 4.5% increase approved for the 2024 fiscal year that was approved in August 2023."

Now, "TVA shared that the 5.25% base rate increase will be taking effect on October 1, 2024."

"Maryville city staff are proposing rate adjustments to three of the city’s utilities, with potential changes coming around January." Haven't heard what Alcoa and Knoxville Utilities Board are doing.

On top of the property tax increase last year, these rate increases make it harder and harder to maintain a home.

Then, "The director of Tennessee’s statewide housing finance agency [Tennessee Housing Development Agency Executive Director Ralph Perrey] offered Blount County residents a solution to high prices (during a presentation at the Blount Partnership ): build more homes.

That's all well and good if the infrastructure holds up. I'm not sure it is. Schools and roads are suffering for sure. Then, we have to wonder how the local municipalities are doing. Are they still able to provide sufficient police and fire services?

U.S. Rep. Tim Burchett claims there was a power blackout at his property. He has a barn with heaters to keep the pipes from freezing. He said the heaters did not come back on after the blackout.

Now, U.S. Rep. Tim Burchett wants to start using more coal power.

"Burchett said he believes that putting more attention on coal energy may be part of a solution."

“With coal, we can get it out of the ground in this area and it provides jobs and also vital heating and electricity during a crucial time,” he added."

TVA responds:

"On Dec. 23, TVA claims they supplied more power than at any other time in its nearly 90-year history. However, they added that this was the highest winter power peak in TVA history."

TVAs initial request to conserve power.

I believe this weather/power event could have been handled better. I didn't even hear about the possibility of blackouts until I spoke with someone in Nashville who knew someone in West Tennessee who thinks they went under a blackout. Although, they live in the boonies with little services anyway. I think those that encountered a blackout could have been warned ahead of time in order to prepare. It is not always good to have certain equipment shutdown without warning.

Why didn't they use the government public alert system to warn people? They use it enough for weather events and missing people as well as testing.

Having said that, I don't think coal is the answer I would fall back on. I'm sure an organization/company as big as TVA with the many engineers can come up with a solution for the future.

Maybe U.S. Rep. Tim Burchett could try to help those people that were negatively affected from any blackouts instead of preaching for coal.

Looks like good stuff

Portland has replaced a section of its existing water supply network with Lucid Energy pipes containing four forty-two inch turbines. As water flows through the pipes, the turbines spin and power attached generators, which then feed energy back into the city’s electrical grid.