The Decatur City Council is aiming to protect its residents from having to pay for the cost of large-scale data centers.
The council voted Oct. 5 to amend its agreement with Decatur Utilities and adopt the Tennessee Valley Authority’s new data center rate structure.
“Data centers touch parts of almost everybody’s life if they have a smartphone or if they work on a cloud-based system,” said Decatur City Councilman Carlton McMasters. “It is part of future infrastructure. Now, do I necessarily want one in my backyard? No, but you know we’re trying to put measures in place to protect our residents.”
The new rate will help ensure that data center operators absorb their high energy costs, rather than passing them to residents.
The Tennessee Valley Authority, which supplies power to Decatur Utilities, recently approved a new wholesale rate structure that includes a 10% rate increase for data centers over the next three years, aligning costs more closely with usage.
“It’s kind of absorbed a little bit better throughout the system, where these things are using just massive chunks of power, depending on the type they are,” said McMasters. “Are they manufacturing a product? Are they employing a lot of people? Usually, no. It’s just kind of a way to keep that proportionate use of electricity for what’s being produced.”
The increase will not affect residential customers’ monthly power bills.
“There’s a lot of ifs with this,” said McMasters, noting the policy is largely precautionary, as no data centers are currently planned for Decatur and the city has limited land area for large-scale facilities.
The city council also passed strict zoning requirements for potential data centers.
Under those rules, a data center must receive approval from several government bodies, apply for a “special exemption permit,” and conduct public presentations on its impact.
