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The Tennessee Conservative [By Olivia Lupia] –
A bill requiring artificial intelligence (AI) data centers that use fifty-plus megawatts in their first three years of operation to pay for their own infrastructure or improvements was officially signed into Tennessee law by Governor Lee.
HB1847 by Rep. Ed Butler and Sen. Brent Taylor aims to prevent power companies from unfairly raising the price of electricity through subsidies to data centers to build or repair their infrastructure.
The legislation prohibits the costs associated with building a new data center or upgrading electrical infrastructure of a center from being absorbed or subsidized by a municipal or electric utility except in limited circumstances. Should upgrades also benefit ratepayers, utilities may then share the cost with a data center.
“Utilities can only share the costs with data centers if the upgrades also benefit other ratepayers beyond the data center of follow the normal rules that apply to all large customers equally,” Taylor said previously.
And Rep. Butler stated, “In Tennessee, we love data centers. We want to have data centers, but we want to put guardrails around that to protect our ratepayers.”
However, the bill has drawn some critique, particularly from environmental advocates, as it also allows the data centers to produce power themselves, without state or local oversight, using equipment like gas turbines or by purchasing power from independent power producers operating outside public utilities.
“This bill removes the guardrails so that independent, gas-fired power plants aren’t prohibited, and they’re not regulated either. Our concern is that these gas-fired power plants will pop up in people’s communities, in their backyards, creating all sorts of new levels of harmful air pollution and potentially bigger strain on their water infrastructure all to serve the data centers of some of the biggest tech companies in the world,” said Trey Bussey, an attorney with the Southern Environmental Law Center.
Bussey also contends the legislation will not provide any “meaningful protections” from higher rates or environmental concerns due to the exceptions added into the legislation before its passage and the state’s inability to regulate utility rates under the TVA’s authority.
He also expressed apprehensions that the deregulations will also mean communities will have no public process or avenue to voice concerns or have issues addressed.
The new law took effect immediately upon the Governor’s signature into law on May 7 and applies to “conduct occurring and contracts or agreements entered into, amended, or renewed on or after that date.”
About the Author: Olivia Lupia is a political refugee from Colorado who now calls Tennessee home. A proud follower of Christ, she views all political happenings through a Biblical lens and aims to utilize her knowledge and experience to educate and equip others. Olivia is an outspoken conservative who has run for local office, managed campaigns, and been highly involved with state & local GOPs, state legislatures, and other grassroots organizations and movements. Olivia can be reached at olivia@tennesseeconservativenews.com.
