SB 2653

B eginning January 1, 2027, this bill prohibits a person from operating a data center without first being issued a permit by the water and wastewater operator board of certification ("board""). This bill grants the board oversight in compliance with the permits and the ability to enforce compliance. As used in this bill, a "" d ata center"" means a privately owned and operated physical facility housing computer servers, storage, and networking equipment to store, process, and distribute data and applications, and that has a power capacity of more than 20 megawatts. PERMIT APPLICATIONS In order t o apply for a permit to operate a data center in this state, this bill requires an applicant to submit the following to the board, in a form prescribed by the board:  The data center's physical address.  The name, mailing address, telephone number, and email address of the persons having responsible charge for the data center's operation.  An approximation of the data center's power capacity.  The name of each water utility, and any governmental entity if applicable, that will provide service to the data center.  The source of water to be used by the data center.  The projected daily, peak, and annual water usage by the data center.  The impact of such water usage on the effected residential, agricultural, emergency, and public water supplies.  Any drought response plan and other contingency planning to be implemented by the data center.  The cumulative impacts on local and regional water systems to be caused by the operation of the data center.  All conservation, reuse, recycling, or closed-loop system measures to be implemented by the data center.  Proof that the data center will not materially impair, degrade, deplete, contaminate, or adversely affect the availability, quality, reliability, pressure, or reasonable and beneficial use of water for residential or public purposes.  Any additional information required by the board by rule. This bill provides that t he requirements above apply to all prospective owners and operators of data centers, including data centers that source their water through municipal or private utilities. After the submission, but prior to the approval, of the application for a permit, the applicant must notify the chair of the board of a change in any information within 30 days of the change. Following the issuance of a permit, and for as long as the permit is valid, the owner or operator must notify the board of any changes in the information within 30 days of the change. BOARD OVERSIGHT In addition to its review of the information submitted by the applicant for a permit, this bill requires the board to evaluate the following as part of the application process:  Wastewater, blowdown, and discharge associated with cooling or operations of the proposed data center.  Chemical composition and thermal impacts of the wastewater, blowdown, and discharge.  The compatibility of the proposed data center's wastewater, blowdown, and discharge with municipal treatment systems.  The potential effects of the proposed data center's wastewater, blowdown, and discharge on consumers of water downstream of the data center. This bill authorizes t he board to deny an application for a data center, or place conditions on an application that has been approved if the data center that is the subject of the application is the source of wastewater, blowdown, or discharges that, in the board's opinion, are reasonabl y likely to degrade water quality; interfere with treatment processes; or impose additional treatment or infrastructure burdens without mitigation. In determining whether an application to operate a data center in this state is approved, this bill requires the board to presume that residential water access and the public need for water access take precedence over industrial and speculative uses of water. Reporting requirements Upon the start of operations by a data center, this bill requires the board to notify each water utility providing service to the data center that the utility must report to the board the amount of water that it supplied or provided to the data center du ring the immediately preceding billing period. This bill also requires a water utility to comply with the reporting requirements. The reports must be provided to the board within 30 days of the end of each billing cycle during which the water utility pr ov ides service to the data center. This bill requires t he owner or operator of a data center to notify the board within 30 days of cessation of operation of the data center. A permit issued is valid until the executive director of the board receives notice of cessation of operation of the data center. Upon receipt of a notice of cessation of oper ation of a data center, the board must notify each water utility providing service to the data center that the reporting requirements will cease with regard to that data center immediately followi ng submission of the report for the final billing period during which the data center was operational. This bill requires t he board to compile the data it receives from reports submitted into monthly reports that clearly state the most recently reported water use of each data center in this state. The department of environment and conservation must publish and maintain the r eports in a publicly available location on the department's website. Other responsibilities In addition to reviewing applications, this bill requires the board to do all of the following:  Hold public hearings to receive testimony from members of the public and local governmental entities that may be affected by the approval of an application, with appropriate notice of such hearings being posted on the department of environment and conservation website and in newspapers of general circulation in the county in which the proposed data center is to be located.  Coordinate with the Tennessee valley authority (TVA) and other relevant agencies to ensure that water availability, residential access, cumulative impact, and discharge quality are fully evaluated when reviewing applications for data centers that propose to use TVA-managed waters.  As part of its oversight of data centers and their long-term impact on this state, conduct biennial evaluations of closed-loop or recirculating water systems, including cooling-water reuse; and require the implantation of the systems where technologically and economically feasible, while operating under the presumption that such systems are feasible unless an applicant can demonstrate the infeasibility of the systems. Data centers are prohibited to externalize water treatment, infrastructure expansion, or remediation costs onto public utilities or ratepayers in this state. ABILITY TO ENFORCE This bill authorizes a person to file with the board a signed complaint against any person allegedly violating this bill. The board may administratively assess a civil penalty of no more than $1, 000 per day up to a maximum of $25, 000 in total for any violation of this bill, including the failure of an owner or operator to obtain a permit or to timely update, correct, or otherwise modify the information provided. Additionally, the commissioner of environment and conservation, on behalf of the board, may seek injunctive relief in the chancery court of Davidson County to prevent the owner or operator of a data center from engaging in any continuing violation of this bill. This bill authorizes a party to a hearing before the board regarding a revocation or an appeal of an order or assessment of a civil penalty by the board to appeal the final order of the board to the chancery court of Davidson County. RULEMAKING This bill authorizes the board to promulgate rules to effectuate this bill."