The Tennessee Valley Authority board on Thursday, Aug. 20, approved a new wholesale rate for data centers, adopted its 2026 Integrated Resource Plan, and approved a fiscal 2027 budget that plans more than $13 billion in spending through fiscal 2029.
New rate structure targets data center costs
The board updated TVA's wholesale rate structure to increase transparency, align rates more closely with cost, and protect residential and manufacturing customers from subsidizing the growth of data center load in the Valley region. TVA said the change reaffirms its commitment under the Ratepayer Protection Pledge, a national initiative meant to ensure data centers and other large power users cover the full cost of the energy and infrastructure their facilities require. TVA interim President and CEO Mike Skaggs said the board's actions position the utility "to meet the Valley's growing demand while continuing to advance American energy leadership." TVA Chair Mitch Graves said maintaining low rates and high reliability for customers "is our first priority."
Resource plan flags 11 to 32 gigawatts of new capacity through 2040
The board also approved recommendations in TVA's 2026 Integrated Resource Plan, a long-term strategy for balancing reliability, affordability, sustainability and flexibility as demand grows. The plan estimates the Tennessee Valley region will need between 11 and 32 gigawatts of additional generation capacity between now and 2040, and identifies a range of generation types that could fill that need while maintaining year-round service.
FY2027 budget commits over $13 billion through FY29
TVA's board approved an FY2027 budget built around the direction set by the resource plan, with affordability and reliability as the stated priorities. The utility plans more than $13 billion in spending through fiscal 2029 to maintain reliability and expand capacity, including more than $1 billion a year to maintain and strengthen its existing generation fleet and transmission system. The budget also funds construction of 4,120 megawatts of new TVA-owned generation capacity, with another 3,000 megawatts under evaluation. TVA Chief Financial Officer Tom Rice said affordability and reliability "remain at the center of every budget decision we make."
Other board actions
In other business, the board also approved the minutes of its May 21, 2026, meeting, TVA's FY2027 incentive measures and goals, the selection of its external auditor, a load increase greater than 100 megawatts, and the divestiture of mineral rights at Sugar Camp.
About TVA
TVA is the nation's largest public power supplier, delivering electricity to about 10 million people across seven southeastern states through a mix of nuclear, hydro, coal, gas, renewable and other generation. It receives no annual federal appropriations and funds its operations from electricity sales. TVA said its residential rates are lower than those paid by 80% of customers at the top 100 U.S. utilities, and its industrial rates are lower than 90% of those customers.
