TVA Repriced Data Center Power. The Tariff Isn’t Public.

The Tennessee Valley Authority Board of Directors met as Meeting No. 26-03 at 1:00 p.m. Central on August 20, 2026, at the Halloran Centre for Performing Arts and Education at 225 S. Main Street in Memphis, Tennessee. That much is on the federal record: TVA filed the Sunshine Act notice on August 14 and it published in the Federal Register on August 18, listing the agenda the board would work through. Three items sat under the Report of the Finance, Rates, and Portfolio Committee, in this order: the FY27 Annual Budget, Rate Change Approval, and the Integrated Resource Plan. A fourth item, Load Greater than 100 MW, sat separately under the External Stakeholders and Regulation Committee. TVA’s own release the same day, titled “TVA Board Protects Consumers, Strengthens Reliability Amid Rising Power Demand,” says the board approved updates to TVA’s wholesale rate structure to increase transparency, be more aligned to cost, and protect residential and manufacturing customers from subsidizing expenses associated with significant growth of data center load. The release ties the action to a Ratepayer Protection Pledge TVA says it recently signed, a national commitment that major power users cover the full cost of the infrastructure built to serve them. TVA Chair Mitch Graves is quoted saying that maintaining low rates and high reliability for customers is the agency’s first priority, and that as AI and advanced industries consume more electricity, the board is making sure hardworking American families and small businesses are not left carrying the cost.

The same release carries the two numbers that explain why the rate moved. TVA’s 2026 Integrated Resource Plan, approved at the same meeting, estimates the Valley will need 11 to 32 gigawatts of additional generation capacity between now and 2040. The FY27 budget commits more than 13 billion dollars in planned investment through FY29 for reliability and capacity expansion, more than 1 billion dollars annually to maintain the existing generation fleet and transmission system, 4,120 megawatts of new TVA-owned capacity under construction, and another 3,000 megawatts under evaluation. Interim President and CEO Mike Skaggs is quoted saying the board actions position TVA to meet the Valley’s growing demand while continuing to advance American energy leadership, and Chief Financial Officer Tom Rice is quoted saying affordability and reliability remain at the center of every budget decision. What the release does not do is describe the rate. It names no threshold, no charge, no effective date, and no percentage. An operator reading TVA’s own account of its own action cannot price it.

The terms that have circulated all come from officials speaking at the Memphis meeting and from same-day accounts of it, not from a filed schedule. Those accounts describe data centers being moved off the manufacturing rate class onto a class of their own, a start date of October 1, 2026, an average billing increase of roughly 10 percent, a three-year phase-in for existing operations, and an upfront capacity commitment charge on new or expanding load above 5 megawatts, paid over three to five years to fund the grid build. The Southern Alliance for Clean Energy, an advocacy organization that follows TVA closely, published its own account the same day and reported the same shape: a new structure, a three-year phase-in, roughly 10 percent more, and an additional charge above 5 megawatts. Its point was that this was the extent of what the public learned. PSV is repeating those terms as reported and labeling them that way, because none of them appears in TVA’s release and none of them can be checked against a rate schedule that has not posted.

The Tennessee Valley is seven states, and cheap power is the reason a great deal of load has gone there. A rate class is not a bill, though, and the structure between TVA and a building is worth stating plainly because it decides who an operator actually negotiates with. TVA’s Form 10-Q for the quarter ended June 30, 2026, filed August 4, describes a wholesale rate structure built on three base revenue components: time of use demand charges, time of use energy charges, and a grid access charge that captures a portion of fixed costs. TVA sells that power to local power companies, and the 10-Q records that 148 of them had signed TVA’s 20-year Partnership Agreement as of June 30, with Memphis Light, Gas and Water and Nashville Electric Service each accounting for 8 percent of TVA’s total operating revenues. A data center does not buy from TVA. It buys from a local power company whose own retail schedule sits downstream of the wholesale change the board just approved. The reported 10 percent is a wholesale average, and the number that lands on a site is whatever the local power company passes through under its own contract.

The reported 5 megawatt trigger is the detail that should move a development calendar, because it is low. PSV covered PJM’s large load rules on July 29, where the definition turns on 50 megawatts measured at a single site inside a one-mile radius, and Pennsylvania’s Executive Order 2026-05 on August 19, which reaches projects with peak demand over 25 megawatts. A trigger at 5 megawatts is a different order of magnitude. It catches enterprise halls, colocation suites, and the AI capacity that firms are adding inside existing industrial buildings, none of which reads as a data center project in the way the headlines use the term. Whether that 5 megawatts is measured as contracted load, connected load, or peak demand, whether it applies per site or per customer, and how a phased build is measured against it are all unanswered, and each answer moves projects in and out of the regime. Separately, the board’s agenda carried Load Greater than 100 MW as its own item under a different committee, which suggests the largest loads are being handled on a track of their own.

There is a second read here for owners of everything else on that grid. TVA’s stated purpose is to stop residential and manufacturing customers from subsidizing data center load. For an industrial landlord in Alabama or Mississippi whose tenants are on manufacturing rates, that is a defensive fact and a good one. For a data center sponsor it is a cost transfer, and the risk an investment committee will ask about is the one the Southern Alliance for Clean Energy put in a single sentence: if TVA builds fifty-year infrastructure to serve a load and the data center operates five years before closing, the remaining customers pay for the rest. Whether the approved rate contains minimum contract commitments and early-termination obligations that address that is not public. That is not a criticism of the design. It is a statement about what an operator can currently verify, which is very little.

The first workflow is a rate-record watch, and it exists because the governing document does not exist yet in public form. The inputs are all primary and all countable: the Federal Register notice for Meeting No. 26-03, TVA’s August 20 release, TVA’s Form 10-Q filed August 4, the 2026 Integrated Resource Plan once TVA posts it, TVA’s data center rate schedules when they publish, any Form 8-K TVA files on the board action, and, per site, the retail schedule and contract of the local power company that actually serves it. An assistant checks each of those sources on a fixed cadence and returns a one-page memo per site with three columns: confirmed against a filed record, reported but unpublished, and unknown. Every cell cites the document it came from, and anything in the second or third column is marked as such in the memo rather than smoothed into prose. The reviewer is the development lead working with energy counsel. The approval gate is that no figure from the second column enters a lender package, an investment committee memo, or an LP update until a human has read it in the filed schedule.

The second workflow is a power cost sensitivity rather than a power cost assumption, and the distinction is the whole point. The inputs are the site’s designed load curve and energization schedule, the current local power company contract, the reported roughly 10 percent wholesale increase, the reported three-year phase-in for existing operations, and the reported capacity commitment charge carried as a range rather than a point because no filed number exists. The output is a band on the power line of the pro forma with the capacity commitment charge modeled as a capital item paid over three to five years ahead of revenue, not as an operating expense, since an upfront commitment paid before a building earns anything changes the funding stack rather than the stabilized margin. The reviewer is the underwriter. The gate is that the band ships with its assumptions labeled reported, not filed, and with the date the record was last checked printed on the page, so that a stale sensitivity is visible as stale instead of passing as fact.