Data centers in Tennessee may soon need to pay for infrastructure costs they create.
This week, the Senate Commerce and Labor Committee passed Senate Bill (SB) 2128, which prevents data center companies from passing on the costs of facility and utility upgrades to customers.
SB 2128, which was introduced by State Senator Brent Taylor (R-Memphis), prevents data center companies from making residential, commercial or industrial customers pay for their utility costs.
Data center companies cannot increase electricity rates for existing customers to increase demand from data centers, according to the bill proposal.
SB 2128 requires utilities to be structured so data centers can cover their own costs. This means they can’t spread data center-related costs onto co-ops, power groups or other customers.
Any rate changes in people’s utilities must come with a statement that data centers are not the cause, the bill proposal notes.
Utility companies can create a new customer class for data centers, making it easier to accurately charge them and preventing costs from being passed on to other customers, according to SB 2128.
The bill proposal allows customers to file complaints against data centers if they think data centers are not accurately following it.
If this bill becomes law, it will go into effect on January 1, 2027.
This week, some states are starting to push back against data centers.
In Port Washington, Wisconsin, voters approved a ballot initiative requiring residents to approve tax incentives before the city provides certain tax-increment financing for future large-scale projects costing more than $10 million. The ballot initiative followed the city’s approval of tax incentives for a $15 billion data center.
In Maine, the state House passed a bill that would impose a moratorium on data centers until Nov. 1, 2027.
“AI data centers are increasingly drawn to locations with available land and strong connectivity, qualities that Maine is well positioned to provide. But if these centers aren’t thoughtfully planned and coordinated, they can place extraordinary demands on electric infrastructure, the surrounding environment and host communities,” said State Representative Melanie Sachs (D-Freeport), who is the sponsor of the bill.
“Implementing a pause and creating this council will give us the time and space to evaluate how these data centers may affect ratepayers, grid reliability, natural resources and local communities. This legislation will position Maine to respond deliberately and responsibly to a rapidly evolving industry.”
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Zachery Schmidt is the digital editor of The Star News Network. Email tips to Zachery at [email protected].
