As new industries and major infrastructure investments reshape our economy, communities like Memphis have to do more than welcome growth. We have to help define its terms.
I believe our voices should be clear and prominent in every discussion about how this infrastructure is built, who bears its costs, and who shares in its benefits. If we get the guardrails right, this investment can strengthen our communities. If we do not, the very places making that growth possible can be left carrying too much of the burden.
That is the lens through which I view the rapid growth of artificial intelligence and data center infrastructure, and it is why I support TVA’s new Data Center Rate Class and Capacity Commitment Charge.
Memphis is quickly becoming an important
part of this growing industry. We recognize the economic opportunity that comes with it.
Serving the demands of large data centers can require new generation and significant investments in the infrastructure needed to connect these facilities to the grid.
Residential and commercial ratepayers should not be asked to absorb those expenses.
TVA’s answer is the right one: new demand should bring new responsibility. The companies creating this new demand should bear the cost of serving it, rather than shifting that burden to families and existing businesses already paying their electric bills every month.
The new structure, consistent with TVA’s Ratepayer Protection Pledge, establishes a separate rate class for large data centers and ensures they will pay higher rates than residential customers. It also requires upfront commitments toward the generation capacity needed to serve them and requires them to fund the transmission and interconnection improvements their facilities require.
Those are important protections for ratepayers. And I believe that same principle should extend beyond our power system.
When we began to see the scale of new investment coming into Memphis, I believed we needed a framework to ensure the communities hosting that investment shared directly in its benefits. We did not want to wait for someone else to decide what responsible growth should look like for Memphis. That is why my administration created and pushed through a first-of-its-kind Community Benefits Ordinance.
The ordinance establishes a simple but important expectation: major economic investment should create tangible benefits for the people and neighborhoods closest to it. For major data center investment, that means a portion of the new property tax revenue generated by these facilities is reinvested in the surrounding community.
That was a deliberate decision. Memphis would not simply react to this new wave of investment. We would establish expectations for how it becomes part of our community.
TVA’s new rate structure reflects a similar philosophy. This is not about slowing growth. It is about getting growth right.
AI and data center infrastructure are developing faster than many of the policies that govern them. The decisions we make now will have lasting consequences. We should establish the guardrails.
For Memphis, that means protecting residential ratepayers, ensuring our infrastructure keeps pace with new demand, and creating opportunities for our workforce and local businesses. We can welcome transformational investment while protecting the people who are already here.
The communities that succeed in this next economy will be the ones capable of supporting major investment while maintaining the trust of the people who call them home. That requires predictable rules for companies, responsible planning by government, and a clear understanding that economic growth should strengthen the community around it.
TVA’s new Data Center Rate Class and Capacity Commitment Charge are important steps in that direction. I encourage the TVA Board to support it.
The infrastructure of the future will be built somewhere. The people who live there deserve a meaningful voice in how it is built and a meaningful share in the opportunity it creates.
Paul A. Young is the mayor of Memphis.
This article originally appeared on Memphis Commercial Appeal: TVA's Data Center Rate Class a step in getting growth right | Opinion
