House committee backs guardrails for large data centers, caps coverage at 50 megawatts

The House Commerce Committee unanimously voted to send HB1847 to the finance committee after debate over resource impacts and community protections.

The bill sponsor described HB1847 as a proactive measure intended to add guardrails for large data centers coming to Tennessee. The amendment defines a covered data center as a facility with electronic equipment to process, store or transmit digital information and a peak electric demand of 50 megawatts or more. The sponsor said the bill protects ratepayers by requiring data centers to pay for required infrastructure and ensures they do not cause rate increases for existing customers.

"The data centers that we have coming to Tennessee are all good actors. This is to prevent anything in the future," the sponsor said, adding the bill provides a definition and clarifies infrastructure and rate protections.

Members raised questions about water use and discharge; one representative asked whether the same precautions for electric utilities were applied to water infrastructure. The sponsor said the bill addresses infrastructure broadly — water, electric, roads and fiber — and stressed the legislation aims to protect small counties and local governments that might otherwise struggle to secure fair agreements.

The sponsor also cited voluntary corporate investments as examples: "Shout out to XAI. They are committing to build a graywater reclamation system in the city of Memphis," the chair noted while discussing industry examples of investments.

The clerk recorded 21 ayes and no nays; HB1847 was referred to the finance committee.

Next steps: Finance will review fiscal and infrastructure implications, including TVA coordination for behind-the-meter generation permissions.