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HOUSE BILL 1847
By Butler
SENATE BILL 2128
By Taylor
SB2128
009419
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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 13, is amended by adding the following
as a new chapter:
13-12-101.
As used in this chapter:
(1) "Cooling equipment" means cooling systems, cooling towers, and
other temperature control infrastructure used primarily for and necessary to the
operation of a data center;
(2) "Cost of infrastructure" means:
(A) All costs that may be capitalized under generally accepted
accounting principles for purchasing, constructing, installing, and
equipping infrastructure; and
(B) The fees or costs imposed by a municipality or utility service
provider:
(i) Related to the construction or installation of
infrastructure; or
(ii) As a condition to the delivery of utility services to the
data center;
(3) "Data center" means a building, either newly constructed, expanded,
or remodeled, that primarily contains electronic equipment used to process,
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store, and transmit digital information, and environmental control equipment and
cooling equipment necessary to maintain the proper conditions for the operation
of the electronic equipment, including cooling equipment;
(4) "Electric cooperative" means a nonprofit electric cooperative or
electric membership corporation, whether organized or operating under title 65,
chapter 25, that distributes electric power purchased from the Tennessee valley
authority;
(5) "Electric service" means the furnishing of electric power and energy
for lighting, heating, power, or any other purpose for which electric power and
energy can be used;
(6) "Electric utility" means a utility that provides and transmits electricity
to individuals and entities located within the jurisdiction of the utility, including:
(A) A municipal electric authority created pursuant to title 7,
chapter 36;
(B) A municipal electric plant operated pursuant to title 7, chapter
52, part 1;
(C) A public utility, as defined under § 65-4-101, that provides
electricity;
(D) The electric utility of a county, metropolitan government,
municipality, or incorporated town or city; and
(E) An electric cooperative;
(7) "Infrastructure" means the streets, roads and road access, bridges,
and sidewalks, and the water, wastewater, natural gas, electric, electric
transmission lines, substations, and transformers, telecommunications, fiber optic
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connections, and storm water facilities, required for the development and
construction of a data center, and benefitting the data center;
(8) "Local government" means a county, metropolitan government,
municipality, city, or other political subdivision of this state;
(9) "Other commercial or industrial customer" means an electric utility
customer that is:
(A) Classified as a commercial or industrial customer; and
(B) Not a data center; and
(10) "Public electric utility" means a public utility, as defined under § 65-
4-101, that provides electric services.
13-12-102.
(a) The owner or operator of a data center, including a proposed data center or
an existing data center seeking expansion, shall pay for the full cost of infrastructure
needed to support the data center, including expansions or upgrades to existing utility
infrastructure necessary to both support the proposed or existing data center and
continue providing the same services to the utility's existing customers.
(b) Subsection (a) does not prohibit a local government, the state, or a utility
from entering into an agreement regarding infrastructure needed to support the data
center; provided, that the agreement does not allow the cost of infrastructure to be paid
for by an entity or individual other than the owner or operator of the data center.
13-12-103.
(a) An electric utility shall:
(1) Conduct the electric utility's ratemaking to ensure that the cost of
infrastructure needed to support provision of electric services to a data center,
including a proposed data center or an existing data center seeking expansion,
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and provision of electric services to such data center, is paid solely by the owner
or operator of the data center; and
(2) Not raise the rate charged to residential customers or other
commercial or industrial customers due to increased electric demand caused by
a proposed data center, existing data center, or expansion of an existing data
center.
(b) In addition to the requirements of subdivisions (a)(1) and (a)(2), an electric
utility shall not distribute the cost, or otherwise require an affected electric membership
or power distribution group or organization to pay, for the cost of infrastructure or electric
demand caused by a proposed data center, existing data center, or expansion of an
existing data center.
(c) Notwithstanding § 65-4-115, § 65-4-122, or another law, an electric utility
may create a new customer class for a data center if necessary to effectuate this
section.
(d) Before an electric utility imposes a rate increase, the electric utility shall
make:
(1) A written finding that the rate increase is not attributable to the data
center; and
(2) The written finding described in subdivision (d)(1) publicly available.
(e) A residential or other commercial or industrial customer, or electric
membership or power distribution group or organization, that believes that an electric
utility has violated this section may submit a complaint in accordance with the following:
(1) If the electric utility is an electric cooperative or public electric utility,
to the Tennessee public utility commission; or
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(2) If the electric utility is a county-owned, municipal-owned, or
metropolitan-owned utility that provides electric services to the public, to the
utility's governing board, or, if there is no designated governing board for the
utility, to the local government that owns or operates the electric utility.
SECTION 2. This act takes effect January 1, 2027, the public welfare requiring it, and
applies to conduct occurring and contracts or agreements entered into, amended, or renewed
on or after that date.