Tennessee Senate Bill SB2128

Tennessee 2025-2026 Regular Session

• Introduced: 1/22/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 5; Title 6; Title 7; Title 13 and Title 65, relative to data centers.

Impact

One of the most significant aspects of SB2128 is its stipulation that owners or operators of data centers are solely responsible for the full cost of infrastructure needed to support their centers. This requirement means that local governments, state entities, or utility companies cannot impose related costs on other customers or entities. Consequently, electric utilities must conduct their rate setting such that existing customers do not absorb costs stemming from new data center demands. This legislative change could significantly affect budgeting and financial responsibilities for utility providers while aiming to attract data center investments in Tennessee.

Summary

Senate Bill 2128 is a legislative act aimed at amending various titles in the Tennessee Code Annotated concerning data centers. Specifically, the bill introduces a new framework for the operation, infrastructure costs, and utility service provisions for data centers. A data center is defined as a facility that contains electronic equipment essential for processing, storing, and transmitting digital information, while cooling equipment is included as integral for maintaining operational conditions. This broad definition ensures that the bill encompasses a wide array of facilities involved in digital services, emphasizing its relevance in a growing digital economy.

Contention

Debate surrounding SB2128 has emerged mainly regarding the implications for local governments and community funding. Proponents argue that the bill will encourage investment in infrastructure and create jobs within the state, positioning Tennessee as an attractive location for data-centric industries. Conversely, critics express concern that placing the financial burden solely on data center operators could allow large corporations to circumvent traditional funding models that often involve shared community resources. Moreover, there is apprehension regarding the potential for increased demands on local utilities and services that may not be fully compensated or recognized under the new framework.