Tennessee officials have presented new rules as a way to keep households from subsidizing the surging power needs of major data centers.
Critics, though, say a carveout in the newly enacted law could still bring pollution, nonstop noise, and minimal oversight to communities near those facilities, according to Raw Story.
What happened?
Tennessee Gov. Bill Lee recently joined 22 other Republican governors in signing President Donald Trump's voluntary "Ratepayer Protection Pledge."
The pledge holds that companies — not households — should bear the costs of building and powering major data centers, but it does not actually enact such measures.
Tennessee's new law requires data centers with power demands of at least 50 megawatts to pay for the grid upgrades needed to serve them.
Sen. Brent Taylor, a Shelby County Republican who sponsored the bill in the Senate, said the measure was meant to keep ordinary customers from seeing increases on their electric bills.
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Still, utilities can continue helping pay for upgrades if the work also benefits other customers or falls under the usual rules for large energy users.
The law also includes an exception for on-site power generation, allowing data centers to use equipment such as gas-powered turbines without review from state or local authorities.
Environmental groups and community coalitions warn that could mean more air pollution and constant noise for nearby areas.
Why does it matter?
Data centers are increasingly being cast as critical infrastructure for artificial intelligence, cloud computing, and future economic growth.
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"America's continued economic and technological leadership depends on reliable, large-scale data center infrastructure built here at home," the pledge states.
Massive facilities use enormous amounts of electricity and water, strain local infrastructure, and increase pollution when they rely on fossil-fuel-powered backup systems or on-site generation.
"Only 9% of voters that we polled had even heard that these tech companies had voluntarily signed onto this pledge that the White House had put together," Sarah Hunt, president and CEO of Rainey Center, said during a July infrastructure summit.
She added that "61% of voters, after we tell them about it, want to see Congress make the Ratepayer Protection Pledge binding law."
What's being done about it?
Tennessee has taken one step by trying to shift some energy infrastructure costs away from ratepayers and onto data center owners.
Lawmakers also weighed stricter measures this year, but none made it through.
Raw Story noted that six bills that would have created more guardrails — including registration, permitting, and reporting on water, electricity, and fuel use — failed to pass.
The Environmental Protection Agency has chosen not to establish nationwide environmental standards for data centers, leaving much of the responsibility to states and local governments.
Some local governments in Tennessee have paused approvals for new data center projects while they develop rules for the rapidly growing industry.
Lee praised the broader effort, writing that Tennessee can "lead the nation in innovation while protecting hardworking families from higher utility bills."
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