The Tennessee Valley Authority board has approved a new wholesale rate structure that will raise costs for data centers connecting to its grid across a service area stretching from southern Virginia to central Mississippi. The utility said the changes are intended to protect residential ratepayers while continuing to meet growing demand tied to data center construction across the region.
Under the new rules, data centers will be removed from TVA's manufacturing service rate class, resulting in charges roughly 10 percent higher for the power they use. The higher rate will phase in for existing customers over the next three fiscal years. New data center projects will face upfront capacity commitment charges of about 1.5 million dollars per megawatt, paid over a period of three to five years, to cover the cost of added grid capacity.
TVA's Integrated Resource Plan projects the utility will need 11 to 32 gigawatts of additional generation capacity in the coming years to keep pace with demand. Data centers already account for about 20 percent of power demand among TVA's industrial customers, a share the utility expects to double in the near term. The new rate structure follows similar moves by utilities in Ohio, North Carolina, and Virginia, each of which has created separate rate classes or cost recovery rules for large data center loads connecting to their grids.
Source: Data Center Dynamics - https://www.datacenterdynamics.com/en/news/us-utility-tva-imposes-new-rates-on-data-center-firms/