Bill > SB2128

This bill establishes new rules for data centers in Tennessee, defining a "data center" as a facility primarily housing electronic equipment for processing, storing, or transmitting digital information, with a significant projected peak electric demand of 50 megawatts or more, and excluding state-owned facilities or those primarily supporting telecommunications networks. The core provision is that the owner or operator of such a data center must bear the full cost of any "electrical infrastructure" – which includes transmission and distribution lines, substations, and related equipment – needed to support the data center's electricity demand. This means municipalities or electric utilities, such as electric cooperatives or municipal electric authorities, cannot pay for or absorb these infrastructure costs themselves, preventing these costs from being passed on to existing utility customers through rate increases. However, there are exceptions allowing utilities to allocate some costs to general system improvements if those improvements benefit other customers, or to reimburse data center operators under specific, non-discriminatory policies. The bill also clarifies that a data center can purchase electricity directly from an "independent power producer," which is an entity that generates or stores electricity and sells it to a data center, and these producers will not be considered public utilities solely for this activity.