Nashville Electric Service has officially moved to align with the Tennessee Valley Authority’s new electricity rate class for data centers approved earlier this summer.
In August, the TVA’s governing board unanimously approved a new rate class for data centers, separating them from its manufacturing service rate customer class and charging them about 10% more for the power they use. TVA leaders said the decision was linked to the utility’s commitment to a voluntary federal pledge to protect ratepayers while data center development interest continues to boom nationwide.
Information shared about the rate change at the NES Electric Power Board’s Sept. 23 meeting was sparse, in part because the board had already discussed developing a separate retail
electricity rate for data centers last month. Last month, the board also signed on to the federal pledge to protect existing ratepayers from data center costs and approved a change requiring data centers to pay more construction costs upfront.
The rate change will be effective starting Oct. 1, NES revenue and rates manager Barry Daniel told board members, the same day TVA’s new rate takes effect. But data centers won't feel the increase immediately — the higher rate will be phased in with a roughly 5% increase per year for the next two years.
“I want to highlight that these aren’t independent NES rate actions,” Daniel said. “These are actions that we are recommending be taken to stay aligned with what TVA is doing, to keep our costs that we are going to incur under how TVA’s going to bill us, keep those aligned with how we bill our customers.”
NES officials said last month that beyond setting a final retail rate structure, the board would also consider additional rules for data centers at future meetings. The board’s Sept. 23 action bookends a summer filled with community backlash against data center development in Nashville.
Austin Hornbostel is the Metro reporter for The Tennessean. Have a question about local government you want an answer to? Reach him at ahornbostel@tennessean.com.
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This article originally appeared on Nashville Tennessean: NES aligns with TVA on higher electricity rates for data centers
