Shown verbatim: the complete text as captured from the official PDF posted by the Tennessee General Assembly, fetched 2026-09-25. Page and line markers are part of the official record; nothing is edited or removed. This is the chaptered version. The official bill page.
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~tate of utennessee
PUBLIC CHAPTER NO. 961
HOUSE BILL NO. 1847
By Representatives Butler, Barrett, Reneau, Howell, Hawk
Substituted for: Senate Bill No. 2128
By Senators Taylor, Walley, Yager, Bailey, Bowling, Crowe, Gardenhire, Lowe, Powers,
Stevens
AN ACT to amend Tennessee Code Annotated, Title 5; Title 6; Title 7; Title 13 and Title
65, relative to data centers.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 7, is amended by adding the following as
a new chapter:
7-70-101. Chapter definitions.
As used in this chapter:
(1) "Cost of electrical infrastructure" means the costs, capitalized under
generally accepted accounting principles, of purchasing, constructing, installing,
or equipping infrastructure that are incurred by a developer, owner, or operator of
a data center, a municipality, or an electric utility and that would not be incurred
but for the actual or expected increase in electric demand resulting from a newly
constructed or expanded data center;
(2) "Data center":
(A) Means a building that:
(i) Primarily contains:
(a) Electronic equipment used to process, store, or
transmit digital information; and
(b) Environmental control equipment necessary to
maintain proper operating conditions for the electronic
equipment described in subdivision (2)(A)(i)(a); and
(ii) Is projected to have a peak electric demand of fifty
megawatts (50 MW) or more during the first three (3) years of
operation; and
(8) Does not include:
(i) A facility owned or operated by the state of Tennessee;
or
(ii) A facility owned or operated by a provider of
telecommunications1 broadband, internet, cable, mobile, or
wireless telecommunications services, or by a broadband internet
access provider, if the facility primarily supports
telecommunications or wireless telecommunications network
operations or broadband internet access services;
(3) "Electric cooperative" means a nonprofit cooperative organized under,
or otherwise subject to, the Rural Electric and Community Services Cooperative
Act, compiled in title 65, chapter 25;
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(4) "Electric service" means the furnishing of electricity for lighting,
heating, power, or other uses;
(5) "Electric utility" means:
(A) A municipal electric authority created pursuant to chapter 36 of
this title;
(B) A municipal electric plant operated pursuant to chapter 52,
part 1 of this title;
(C) A public electric utility;
(D) An electric utility operated by a county, metropolitan
government, municipality, or other political subdivision of this state; or
(E) An electric cooperative;
(6) "Independent power producer" means an individual, partnership,
cooperative, association, corporation, joint stock company, limited liability
company, or other entity, including the entity's lessees, trustees, or receivers
appointed by a court, that:
(A) Owns, operates, manages, or controls, within this state, a
facility, system, plant, or equipment used to generate or store electric
energy;
(B) Sells, or agrees to sell, electric energy, capacity, or other
related or ancillary services from the facility, system, plant, or equipment
described in subdivision (6)(A) pursuant to one (1) or more written
agreements with one (1) or more of the following:
(i) A data center owner or operator for the end-use
consumption of the electric energy, capacity, or other related or
ancillary services; or
(ii) A wholesale purchaser of the electric energy, capacity,
or other related or ancillary services, including an electric utility or
the Tennessee valley authority; and
(C) Does not include an individual or entity that holds out electric
energy, capacity, or other related or ancillary services for sale to a
customer other than a data center owner or operator described in
subdivision (6)(B)(i) or a wholesale purchaser described in subdivision
(6)(B)(ii);
(7) "Infrastructure" means electrical transmission and distribution facilities,
including transmission and distribution lines, service lines and conductors,
substations, transformers, switching stations, metering equipment, protection and
control equipment, and related equipment and appurtenances, and includes
rights-of-way and easements necessary to construct, operate, or maintain the
facilities, if the facilities are owned by an electric utility or a municipality;
(8) "Municipality" means a county, metropolitan government, or
incorporated city or town in this state; and
(9) "Public electric utility" means a public utility, as defined in § 65-4-101,
that provides electric service.
7-70-102. No subsidies for cost of electrical infrastructure - Independent power
production to serve data centers.
(a) Except as otherwise provided in this section, a municipality or electric utility
shall not pay, or otherwise absorb, the cost of electrical infrastructure incurred to serve a
data center.
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(b) An electric utility may assign or allocate a portion of the electric utility's costs
associated with the cost of electrical infrastructure to general utility system
improvements if:
(1) The associated improvements include improvements beyond those
necessary to deliver electric service to the data center;
(2) The associated improvements may be used to deliver electric service
outside the data center while continuing to provide the same electric service to
the electric utility's existing customers;
(3) The costs are incurred in connection with the repair, maintenance, or
replacement of infrastructure for which a person other than the electric utility
originally incurred the cost of electrical infrastructure; and
(4) The assignment or allocation is made in accordance with the electric
utility's contribution-in-aid-of-construction policies, or the electric utility's other
policies or practices, governing the assignment or allocation of the costs.
(c) An electric utility may reimburse a data center owner or operator for the cost
of electrical infrastructure incurred by the data center owner or operator if:
(1) The reimbursement is made in accordance with the electric utility's
standard policies or procedures;
(2) The policies or procedures apply to customers receiving comparable
service from the electric utility;
(3) The policies or procedures are not exclusively applicable to data
centers;
(4) The policies or procedures do not result in more favorable
reimbursement to the data center than to other customers receiving comparable
service; and
(5) The reimbursement does not cause existing customers to incur a rate
increase.
(d) A municipality or electric utility is not liable to an individual or entity for
refusing to honor an obligation that is void under this section.
(e) A data center may purchase and receive electric energy, capacity, or other
related or ancillary services from an independent power producer located in this state.
An independent power producer located in this state may generate, store, sell, or deliver
electric energy, capacity, or other related or ancillary services to a data center through:
(1) A direct interconnection behind the data center's meter if the data
center does not take service from an electric utility;
(2) A direct interconnection behind the data center's meter with the written
approval of the applicable electric utility if the data center takes service from an
electric utility; or
(3) Access to transmission or distribution facilities owned or operated by
one (1) or more electric utilities or the Tennessee valley authority.
(f) The activities authorized by subsection (e) are subject to applicable federal
law.
(g) Except to the extent federal law provides otherwise, access to transmission or
distribution facilities under subdivision (e)(3) is provided at the election of, and on terms
and conditions established by, the owner of the transmission or distribution facilities.
(h) This section does not supersede an obligation imposed upon an electric utility
by federal law or a binding order of a federal agency of competent jurisdiction.
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(i) If this section conflicts with a term, condition, rate schedule, or requirement of
the Tennessee valley authority, then the term, condition, rate schedule, or requirement
of the Tennessee valley authority controls, and an electric utility is not required to comply
with this section to the extent of the conflict.
SECTION 2. Tennessee Code Annotated, Section 65-4-101 (6), is amended by adding
the following as a new subdivision:
(E) "Public utility" does not include an independent power producer, as defined in
§ 7-70-101, solely because the independent power producer owns, operates, manages,
or controls an electric generating or storage facility in this state and sells or delivers
electric energy, capacity, or other related or ancillary services to a data center pursuant
to an agreement under§ 7-70-102(e).
SECTION 3. The headings in this act are for reference purposes only and do not
constitute a part of the law enacted by this act. However, the Tennessee Code Commission is
requested to include the headings in any compilation or publication containing this act.
SECTION 4. This act takes effect upon becoming a law, the public welfare requiring it,
and applies to conduct occurring and contracts or agreements entered into, amended, or
renewed on or after that date.
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HOUSE BILL NO. 1847
PASSED: April 22, 2026
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CAMERONSEXTON,SPEAKER
HOUSE OF REPRESENTATIVES
RANDY MCNALI-Y
SPEAKER OF THE SENAtE
v:Y\i ,. 'Jc 7 APPROVED this tf)... day of 2026
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BILL LEE, GOVERNOREvery fact on this page links to its source, starting with the official bill record.