TVA Raises Data Center Rates as Riley Introduces Fair Data Act

The Tennessee Valley Authority (TVA) board approved a new wholesale electricity rate for data centers effective October 1, 2026, to shield residential and small business customers from the costs of artificial intelligence growth. The rate change will increase data center billing by approximately 10%, phased in over three fiscal years. This action follows a July Ratepayer Protection Pledge requiring large power users to cover their own energy and infrastructure costs. During the meeting, the board also approved SpaceXAI as a directly served customer and authorized over $13 billion in investments through fiscal year 2029 to expand generation capacity.

Simultaneously, U.S. Representative Josh Riley and Congressman Jeff Van Drew introduced the Fair Data Act. This bipartisan federal bill seeks to prevent the costs of power generation and grid upgrades for large-scale AI data centers from being passed to residential and small-business ratepayers. The legislative push follows reports from Oneonta, New York, where residents claim monthly utility bills have more than doubled, leading to a local moratorium and a statewide moratorium on new hyperscale data centers signed by Governor Kathy Hochul.

TVA leadership stated the rate modernization ensures the agency can meet rising regional demand while maintaining reliability. Representative Riley argued that while economic development is desired, it must be a good deal for local residents rather than a handout to large corporations.