NASHVILLE, Tenn. (WTVF) — The Tennessee Valley Authority has reversed course on its plan to close all coal plants by 2035, deciding instead to keep the Cumberland City coal plant in Stewart County open indefinitely. NewsChannel 5 has reported extensively on the prospects of the plant closing. The fossil plant in Kingston will also remain open. The decision comes as artificial intelligence data centers drive unprecedented demand for electricity across the Tennessee Valley.
TVA's board of directors approved the resolution Wednesday with a simple voice vote, citing the explosive growth in data center demand as a primary factor. "Data Center demand climbed to 18 percent of our industrial load in 2025 and we're projecting data center demand to double in our region by 2030," TVA CEO Dan Moul said.
To put that growth in perspective, TVA said the current data centers in the Tennessee Valley, plus requests for new ones, would be equivalent to powering 6 million homes.
Tennessee currently offers tax incentives to attract data centers to the state, but the massive electricity requirements are raising questions about whether these investments remain beneficial.
House Speaker Cameron Sexton sees Tennessee as positioned to become a world leader in AI and quantum computing. "I think we're the only state at this point that is prepared and can handle XAI or the AI technology," Sexton said. "You put those together and we will be competing with China and other countries, not with states. And that's where we're trying to move to. It all starts with the energy that we have."
However, Tennessee Democrats are calling for more transparency from AI companies before determining the best path forward. "There's certainly an economic value to the state of Tennessee for these data centers. It's something that has to be weighed heavily against the impact on consumers and the environment and everyone's electric utility bills," said Rep. John Ray Clemmons, House Democratic Caucus Chair. "That is a real balancing act that the state and all of us are going to have a say in."
Sen. London Lamar, Senate Democratic Caucus Chair, said she has legislation to bring more transparency to data centers.
Governor Bill Lee wants to see more AI centers create their own power, similar to XAI in Memphis. "What's important is that if we have a big user, like a data center, that proposes to come into this state, then they should have a plan that is not going to have a negative effect on the rate payers and on the users of the grid in our state," Lee said.
The debate over data centers and their electricity costs is only expected to continue.
Additionally, TVA says they're exploring ways to ensure data centers don't drive up electric costs for residential customers.
Do you have more information about this story? You can email me at Chris.Davis@NewsChannel5.com.
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