Data center electricity use has skyrocketed in Tennessee and beyond
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Data centers are already reshaping the power grid, a new report finds, with the demand for those facilities in the Tennessee Valley region pulling enough electricity to power more than 661,000 homes.
Why it matters: Policymakers at every level are scrambling to set rules around how data centers can operate in Tennessee, and the new report, from nonprofit ThinkTennessee, shows the stakes.
- If growth isn't managed properly, the report warns, the data center boom may strain grid reliability and push more costs onto residential households.
By the numbers: In the Tennessee Valley region, which includes most of this state as well as parts of six neighboring states, data center usage has skyrocketed in recent years, from 1.27 million megawatt-hours in 2020 to 9.16 million MWh in 2025, according to Tennessee Valley Authority data analyzed in the report.
State of play: Households are experiencing bigger electricity bills, while commercial customers have actually seen electricity costs go down, the report says.
- In parts of Tennessee that host data centers, residential electric bills rose 3.2% from 2023 to 2024, the report says, while commercial customers in those areas saw bills decrease by 0.2%.
What they're saying: "Data centers are very quickly changing the energy needs of our state," ThinkTennessee president Erin Hafkenschiel said in a statement. "Decisions made now about planning, pricing, and infrastructure will determine who bears the costs of this growth."
- "If we don't get it right, the potential risks to household energy costs might outweigh the positive economic growth impacts."