Legislation Requiring AI Data Centers In Tennessee To Self-Fund Passes In House, Up For Vote In Senate

Image Credit: TN General Assembly

The Tennessee Conservative [By Paula Gomes] –

Legislation requiring artificial intelligence (AI) data centers that use fifty-plus megawatts in their first three years of operation to pay for their own infrastructure or improvements is closer to becoming law after passing on the House floor and is also scheduled for a vote in the Senate today, April 22nd, 2026.

The proposed law seeks to prevent power companies from unjustly raising rates on Tennesseans.

The House passed HB1847, sponsored by Representative Ed Butler (R-Rickman-District 41), in a 76 to 14 vote on Tuesday while the companion bill, SB2128, sponsored by Senator Brent Taylor, was passed in the Senate Finance, Ways, and Means Committee in a 10 to 1 vote. 

Regulating AI has been a key focus of the Tennessee General Assembly this year.

The legislation prohibits the costs associated with building a new data center or upgrading electrical infrastructure of a center from being absorbed or subsidized by a municipal or electric utility except in limited circumstances. In the event that upgrades also benefit ratepayers, utilities may share the cost with a data center.

“This bill will clarify that cities and counties and electrical utilities, including co-ops and public utilities, cannot use ratepayer money to cover the data center’s required costs, so there’s no subsidies for data centers,” Taylor has explained. “This legislation is designed to protect utility ratepayers from the higher electric bills due to massive data center growth.”

About the Author: Paula Gomes is a Tennessee resident and reporter for The Tennessee Conservative. You can reach Paula at paula@tennesseeconservativenews.com.