TN — Power Infrastructure Updated 2026-07-17

Tennessee

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1) Grid operator and market structure

  • Balancing authority / reliability coordination: The Tennessee Valley Authority (TVA) remains the dominant regional power provider and balancing authority for most of Tennessee’s data-center load, serving local power companies across the Valley region. TVA, accessed 2026-06-10
  • Regional reliability footprint: TVA’s service territory spans a seven-state region and serves more than 10 million people, making TVA and its local power companies the key planning entities for Tennessee data-center electricity demand. TVA, accessed 2026-06-10
  • Market structure: Tennessee does not have retail electric deregulation comparable to restructured ISO/RTO states; EIA’s retail-sales data show Tennessee sales by full-service providers rather than energy-only retail suppliers. EIA Tennessee electricity profile, accessed 2026-06-10
  • Rate authority: TVA’s FY2025 Form 10-K states that the TVA Board has sole responsibility for setting TVA power rates and that those rates are not subject to review or approval by any state or other federal regulatory body. TVA FY2025 Form 10-K, 2025-11-13

2) Interconnection queue (status, wait times, reforms)

  • Queue access and procedures: TVA directs generator interconnection customers to its portal and OASIS/LGIP materials; no comprehensive public queue list covering load and data-center requests was available as of July 17. TVA Generator Interconnection, accessed 2026-07-17
  • Queue depth & wait times: TVA does not publish a public, comprehensive load-queue depth or average-wait-time dataset comparable to ISO/RTO interconnection queues. ThinkTennessee reported that TVA had received about 11,000 MW of prospective data-center service requests by July 2025, but stressed that these requests are not all committed projects and could include duplication. ThinkTennessee, 2026-07-07
  • Federal queue reforms do not directly cover TVA: FERC’s June 18 show-cause orders on large-load interconnection practices went to six RTOs/ISOs, not TVA. Tennessee therefore still lacks a new, public TVA-specific large-load interconnection rule or queue disclosure comparable to the processes under federal review in organized markets. Federal Energy Regulatory Commission, 2026-06-18; TVA Generator Interconnection, accessed 2026-07-17
  • IRP transparency step: TVA published its Preliminary Final 2026 IRP and EIS for comment through July 22 and scheduled the final recommendations for Board consideration in August. TVA explicitly says actual and forecast demand are rising primarily because of population and data-center growth. TVA 2026 Integrated Resource Plan, accessed 2026-07-17

3) Ratepayer protection (large-load tariffs / cost allocation / PSC dockets)

  • Public Chapter 961 changed the cost-allocation baseline: Tennessee enacted HB1847/SB2128 as Public Chapter 961, generally prohibiting municipalities and electric utilities from paying or absorbing electrical-infrastructure costs incurred to serve covered data centers projected to reach 50 MW+ peak demand in the first three years. Its operative provisions apply to conduct and contracts entered, amended, or renewed on or after July 1, 2026. Tennessee Secretary of State Public Chapter 961, 2026-05-07
  • Independent-power option: Public Chapter 961 also authorizes a covered data center to buy electric energy, capacity, or ancillary services from an in-state independent power producer, including behind-the-meter delivery if the data center is not taking utility service or with written utility approval if it is taking utility service; the law is expressly subject to federal law and TVA terms where applicable. Tennessee Secretary of State Public Chapter 961, 2026-05-07
  • TVA rate-fairness and rate-class process remained pending: TVA CEO Don Moul pledged in February that new data centers would not create rate pressure for other customers. TVA then worked with its 153 local power companies on a new data-center rate class or related rate changes. By July 16, TVA said it planned to present the large-load rate at the August 20 Board meeting; no final tariff or special rate class had been adopted by July 17. Axios Nashville, 2026-02-09; WVLT, 2026-05-27; WPLN, 2026-07-16; TVA Board meeting schedule, accessed 2026-07-17
  • No conventional state PSC electric-rate docket for TVA rates: Because TVA rates are set by the TVA Board and not reviewed by a state public utility commission, Tennessee’s ratepayer-protection path is TVA board/rate policy plus local power company implementation and the new state cost-allocation statute, rather than a conventional state PSC large-load tariff docket. TVA FY2025 Form 10-K, 2025-11-13; Tennessee Secretary of State Public Chapter 961, 2026-05-07
  • Clean Transition Tariff proposal died: SB1999/HB2054 would have authorized TPUC-approved clean-transition tariffs and annual reporting for large energy-intensive users, but HB2054 was taken off notice on March 4 and SB1999 was assigned to General Subcommittee on March 10. Tennessee General Assembly HB2054/SB1999, 2026-03-10; Tennessee Fiscal Review Committee, 2026-02-26

4) Generation adequacy (projects under construction or planned)

  • System capacity need driven by large loads: TVA’s FY2025 annual report says TVA had more than 6,200 MW of new generation planned and 3,770 MW under construction; TVA’s February 2026 rate-fairness comments connected that investment backdrop to rapid demand growth from data centers and AI. TVA FY2025 Annual Report, 2025-11-13; Axios Nashville, 2026-02-09
  • TVA 2026 IRP reached preliminary-final review: TVA posted a Preliminary Final IRP and EIS in July and opened comments through July 22. The final recommendations were scheduled for August Board consideration, so no final resource-plan decision had been made by July 17. TVA says population and data-center growth are the primary drivers of rising actual and forecast demand. TVA 2026 Integrated Resource Plan, accessed 2026-07-17
  • Near-term demand forecast and generation additions: TVA’s first-quarter investor presentation projects about 2% annual demand growth over the next five years, driven by migration, economic development, and data centers. TVA also disclosed a 200 MW Allen combustion-turbine project and a 350 MW Lagoon Creek addition; these are system resources rather than data-center-dedicated plants. TVA First Quarter FY2026 Investor Presentation, 2026-02; TVA First Quarter FY2026 Form 10-Q, 2026-02-05
  • Cumberland replacement (gas): TVA is building the Cumberland combined-cycle gas project, which remains one of the major near-term firm-resource additions in the Tennessee Valley system. TVA Cumberland Fossil Plant Retirement, accessed 2026-06-10
  • Kingston Energy Complex (gas + storage + solar): TVA continues to describe the Kingston replacement as a planned energy complex including gas generation, battery storage, and solar as part of coal-retirement replacement planning. TVA Kingston Fossil Plant Retirement, accessed 2026-06-10
  • SMR development (nuclear): TVA’s Clinch River small modular reactor pathway remains part of long-term resource planning, but it is not a near-term 2026 solution to data-center interconnection constraints. TVA Clinch River Nuclear, accessed 2026-06-10

5) Utility load forecasts (data center impact)

  • Official state fiscal notes quantify high-capacity data centers: Tennessee Fiscal Review listed 61 data centers in the state and cited high-capacity examples: xAI Memphis 280 MW, Meta Gallatin 300 MW, Evoque Sumner 100 MW, and a second xAI Memphis data center expected in 2026 with 1,563 MW planned capacity. Tennessee Fiscal Review Committee, 2026-02-26
  • TVA industrial-load exposure is material: Axios reported in February that TVA said data-center demand made up 18% of industrial load in 2025 and expected data-center growth to double by 2030; WVLT reported in May that TVA described the range as 18% to 20% of industrial load and still potentially doubling by 2030. Axios Nashville, 2026-02-09; WVLT, 2026-05-27
  • Observed consumption and capacity: ThinkTennessee’s July study, drawing from federal and TVA sources, estimated that Tennessee Valley data-center electricity use rose 7.2-fold in five years to 9.2 million MWh in 2025, equivalent to the annual use of about 661,000 homes. It identified 2,177.5 MW of operating, under-construction, and planned Tennessee data-center capacity—about 5.3% of TVA’s net summer capacity—but warned that project lists and service requests are not the same as committed load. ThinkTennessee, 2026-07-07
  • Project-pipeline uncertainty: Cleanview continues to list Colossus 2 at 1,563 MW and Cielo Clarksville at 350 MW, but Clarksville officials said on June 19 that no data-center proposal was under discussion. The Cielo entry should not be treated as a utility-confirmed queue position, and aggregate market-intelligence totals should be read accordingly. Cleanview, updated June 2026; WSMV, 2026-06-19

6) Behind-the-meter / co-location / direct PPAs

  • Behind-the-meter/self-generation is now explicit policy: Public Chapter 961 authorizes a data center to receive power from an independent power producer through behind-the-meter interconnection or through utility/TVA facilities subject to the statute’s limits, federal law, and TVA terms. Tennessee Secretary of State Public Chapter 961, 2026-05-07
  • xAI illustrates the operational stakes: The Colossus 2 dispute involves rapid gas-turbine deployment in Southaven, Mississippi to power Memphis-area AI compute. Plaintiffs alleged growth from 27 turbines capable of up to 495 MW to 33 turbines by May; Reuters reported in July that 59 turbines had been installed for the project, at least 57 in Mississippi, without federal operating permits. Those turbine counts and permitting allegations remain contested in litigation and should not be treated as a final regulatory finding. SELC, 2026-05-13; Earthjustice, 2026-05-06; Reuters, 2026-07-14
  • Direct renewable procurement (Green Invest): TVA continues to describe Green Invest as its pathway for large customers to procure renewable energy through TVA-facilitated projects. TVA Green Invest, accessed 2026-06-10

7) Transmission constraints and upgrades

  • Electrical infrastructure costs are now statutorily assigned: For covered data centers, the new Tennessee law treats transmission and distribution lines, service lines, substations, transformers, switching stations, metering equipment, protection/control equipment, rights-of-way, and easements as covered electrical infrastructure when they would not be incurred but for the data center’s electric demand. Tennessee Secretary of State Public Chapter 961, 2026-05-07
  • TVA approved another xAI firm-power arrangement: At its February 11 meeting, the TVA Board authorized a firm-power arrangement greater than 100 MW with CTC Property LLC (xAI); the presentation described an approximately 150 MW request. Public materials identify the customer and scale but do not disclose the project-specific transmission upgrades or cost assignment. TVA Board presentation, 2026-02-11; TVA Board meeting recap, 2026-02-11
  • Transmission planning remains opaque at the project level: TVA’s public materials do not provide data-center-specific load-interconnection studies or upgrade-cost assignments for Colossus 2, DC BLOX Nashville, or the unconfirmed Cielo listing. TVA Generator Interconnection, accessed 2026-07-17; WPLN, 2026-07-16

Gaps / items not publicly disclosed