U.S. TVA Board Adopts Spending Plan, Commits to Shielding Smaller Customers from Large Electric Users' Costs

Written by John Egan for IIR News Intelligence (Sugar Land, Texas)

Summary

The Tennessee Valley Authority Board of Directors last month approved investing over $13 billion for capital and maintenance projects through September 30, 2029, and adopted a plan to protect residential and small-business customers from the costs of serving large energy loads such as data centers.

Planned Data Centers Drive Spending Decision

According to Industrial Info Resources data, the Tennessee Valley Authority (TVA) plans to invest about US$51 billion in 72 electric power-related capital projects. Readers can view a detailed project list here.

On August 20, the TVA Board of Directors approved plans to spend over US$13 billion on electric power projects through the agency's fiscal year 2029, which ends September 30, 2029.

The board adopted the investment plans laid out in a preliminary final integrated resource plan (IRP) released earlier this summer. For more on that, see July 1, 2026, article - Meeting the (Planned) Moment: TVA, Data Centers and Power Demand in Southeast U.S.

TVA provides wholesale electricity to about 153 locally owned electric utilities in seven states: Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee and Virginia. The agency also sells electricity directly to about 62 industrial customers in the region.

The TVA power region has experienced a surge in planned data center construction as well as robust local population growth, TVA spokesperson Scott Brooks told Industrial Info Resources.

The IRP, a long-term resource roadmap, looked out to 2040 and concluded the agency needed to add between 11,000 megawatts (MW) and 32,000 MW of new generating capacity, much of which would be fueled by natural gas. Those additions include:

• Between 7,000 MW and 26,000 MW of gas-fueled simple and combined-cycle combustion turbines.
• Up to 5,000 MW of new nuclear generation.
• Between 3,000 MW and 12,000 MW of nameplate renewable energy generation.
• Implementation of 2,000 MW to 3,000 MW of new customer energy efficiency and demand response programs.
• Between 1,000 MW and 5,000 MW of energy storage, which could mean batteries or hydroelectric pumped storage.

This long-term plan also reflected the effect of planned power plant retirements.

According to Industrial Info Resources data, Big Tech firms and data center developers plan to build 1,364 data centers in those seven states. The value of those projects is roughly US$1 trillion. The Global Market Intelligence (GMI) Industrial Manufacturing Project database offers a list of the proposed data centers here.

Industrial Info Resources does not expect that all of those planned data centers will keep their construction schedules. Some projects will be cancelled or delayed while others may be added.

TVA spokesperson Brooks told Industrial Info Resources that "data centers are coming. In recent years, data centers have gone from 1-5% of our industrial load to about 18% today, and we expect that percentage to double by 2030." Industrial customers account for about 60% of TVA's electric load, he added.

TVA said its industrial rates are lower than 90% of the nation's top 100 utilities. Low electricity costs are an important factor in siting data centers.

The August 20 budget decision included funding construction of about 4,120 MW of new TVA-owned generation. That portfolio included the continued construction of new gas-fired generation at the Cumberland site in Tennessee, which is nearly complete, as well as the planned construction of new gas-fired generation at the Kingston site in Tennessee, scheduled to finish by the end of 2027. Each site is expected to add between 1,100 MW and 1,400 MW of generating capacity, Brooks said.

Also funded was an innovative solar power project, Phoenix, where 100 MW of solar cells were being laid atop the closed coal ash storage facility at TVA's Shawnee site in West Paducah, Tennessee. That project will use a flexible substrate so that any settling of the ash pond will not affect the solar generation.

The board also voted to fund construction of about 3,000 MW of other generation projects that had been under evaluation, most of which would also burn gas. TVA may or may not own this generation. Some of this generation will be needed because a planned power complex in Cheatham County, Tennessee, was cancelled in July 2025 after it was opposed by local residents. This project would have included a 900-MW gas-fired plant plus battery energy storage systems (BESS). It is not yet been decided where exactly this replacement generation will be sited, Brooks said.

Commenting on the TVA's August 20 board actions, Mike Skaggs, the agency's interim president and chief executive officer, said, the actions will help TVA "meet the Valley's growing (electric) demand while continuing to advance American energy leadership. We're building the right resources, adjusting (prices) responsibly and planning for a future that strengthens communities, supports economic growth and delivers the affordable, reliable energy that millions of people depend on."

By the Numbers

• Over US$13 billion: The dollar value of power projects approved August 20 by the TVA Board of Directors. These investments will be made through September 30, 2029
• 4,120: The amount, in megawatts, of TVA-owned electric generating capacity covered by the board's August 20 vote
• 3,000: The additional approximate amount of electric generating capacity, in megawatts, that was also approved for funding. This generation has been under evaluation by TVA, which may or may not own it

TVA Also Seeks to Protect Small Energy Users

The TVA August 20 press release also referenced an action the agency took earlier this summer when it signed the Trump administration's "Ratepayer Protection Pledge," which seeks to shield residential and small business customers from the incremental costs created by serving large energy loads like data centers.

That pledge was announced by the White House March 4. Companies that signed that pledge agreed to "protect American consumers from (electric) price hikes due to data center energy and infrastructure requirements." Any incremental costs incurred to serve large energy users would be borne by those users, and not homeowners or small businesses.

The White House said that pledge has been signed by many of the country's largest electricity providers, including American Electric Power, Arizona Public Service, Dominion Power, Duke Energy, DTE Energy, PG&E, PSEG, Southern Company and Xcel Energy.

Since all of those utilities have their electric prices set by state utility regulatory panels, it is not clear that the pledge will be binding on those state bodies. As the TVA board sets its electricity prices, and most of the agency's board members are answerable to Trump, it appears the agency has the legal authority to implement its pledge.

Key Takeaways

• The TVA Board of Directors voted August 20 to make over US$13 billion of investments in its system through September 30, 2029.
• These investments are for generation and transmission projects.
• Earlier this summer, the agency signed onto the Trump administrations plan to protect residential and small-business customers from the incremental investments needed to serve large electric loads such as data centers.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).