HB 2054

This bill authorizes the Tennessee public utility commission ("commission"") to approve a clean transition tariff for large energy-intensive users and requires such user s to fund incremental generation and grid upgrades proportionate to their usage. As used in this bill, a ""large energy-intensive user"" (""user"") is a single facility or campus that has a peak electric demand of 25 megawatts or greater or is primarily engaged in data processing, AI training, cloud computing, high-performance computing, or crypto-adjacent operations . CLEAN TRANSITION TARIFF This bill authorizes t he commission to approve one or more clean transition tariffs applicable to such users if the clean transition tariff meets the following requirements :  Allow s such a user to voluntarily procure incremental clean power sufficient to serve 100% of the user's incremental load .  Ensure s that generation resources developed under the tariff are new and additional .  Prohibit s the recovery of any costs from residential or small business customers .  Is structured to preserve grid reliability and affordability. FUNDING INCREMENTAL GENERATION AND GRID UPGRADES This bill holds such a user responsible for the reasonable and proportional costs of transmission and distribution upgrades, substation construction or expansion, and grid reliability and resilience investments required to serve incremental load. The costs must not be recovered from residential or small business customers. TENNESSEE VALLE Y AUTHORITY AND LOCAL POWER COMPANIES Generally, t his bill does not alter or impair the federal authority of the Tennessee v alley a uthority . H owever, local power companies serving such users must ensure that incremental load is served in a manner consistent with the protections established in this bill. Additionally, a local power company serving such a user must requir e the following:  Participation in a clean transition tariff or equivalent TVA-approved rate structure that provides incremental clean and reliable power and prevents cost-shifting to residential and small business customers.  The user to bear the proportional cost of grid upgrades necessary to serve the user's incremental load. This bill requires t he commission to coordinate with the TVA and local power companies to review tariff structures applicable to such users, ensure compliance with residential rate protection s, and receive annual reporting on large-load impacts and cost allocation . RATEPAYER PROTECTION Prior to approving service for such a user, this bill requires a local power company to demonstrate that residential and small business customers will not experience a rate increase due to the user's incremental load; and all incremental generation and grid costs are fully allocated to the user. REPORTING On January 1, 2027, and each year thereafter, this bill requires the commission to submit a report to the members of the senate commerce and labor committee, the members of the committee of the house of representatives having jurisdiction over utilities, and the legislative librarian, detailing all of the following:  The number of such users served in this state .  Total incremental load added statewide .  Clean energy resources developed under clean transition tariffs .  Grid investments funded by such users .  Verified impacts on residential and small business rates. RULEMAKING This bill authorizes t he commission to promulgate rules necessary to effectuate this bill, including compliance standards, verification requirements, and reporting procedures APPLICABILITY This bill applies to all new or expanded large energy-intensive users seeking electric service in this state on or after July 1, 2026."