Tennessee Electricity Rate Changes: What Changed in 2026 and What's Next

Tennessee works differently from most states. The Tennessee Valley Authority (TVA), a federal agency, generates most of the state’s power and sells it to local power companies, which bill households. TVA’s fiscal year begins October 1, so that is the date wholesale rate changes usually start. For October 1, 2026, we found no base rate increase.

This article covers TVA’s wholesale actions. It does not cover the retail rates of individual local power companies, or Kingsport Power, which is outside the TVA system.

Quick Summary

What TVA’s Board Did on August 20, 2026

According to TVA’s announcement, the board:

• Created a data center rate. TVA said the aim is to keep households and manufacturers from subsidizing data center costs. Earlier reporting on the proposal described an average billing increase of about 10% for data centers, phased in over three fiscal years starting October 1, 2026, with a capacity commitment charge for new or expanding loads above 5 megawatts.
• Approved the fiscal 2027 budget, including more than $13 billion planned through fiscal 2029 for reliability and new capacity.
• Approved its 2026 Integrated Resource Plan, which projects a need for 11 to 32 gigawatts of new generating capacity by 2040.

The announcement does not mention a base rate increase for other customers. TVA’s chair, Mitch Graves, said the board is “making sure that hardworking American families and small businesses aren’t left carrying the cost.”

Recent History

TVA raised base rates in consecutive years before this. A Memphis TV report in 2024 described the board voting to raise rates for a second straight year. We did not verify the percentages for this article.

Why Your Bill Can Still Change

• Fuel cost adjustment. TVA adjusts this monthly.
• Local power company rates. Your city utility or cooperative can raise its own charges, including the fixed monthly customer charge.
• Seasons. TVA wholesale rates differ by season, and winter usage is high in electrically heated homes.

What This Means for Homeowners With Solar

Solar rules in the TVA region are set by TVA and your local power company, not by a state commission. We did not verify current terms for this article. Before signing a contract, ask your local power company how exported energy is credited and at what rate, and get it in writing.

Our solar payback guide shows how the retail rate and the export credit change the math.

What to Check on Your Bill

1. The name of your local power company and its current residential rate schedule.
2. The customer charge.
3. The fuel cost adjustment line for the month.

For help sorting the lines on your bill, see our guide to reading your electric bill.

What Happens Next

TVA’s next fiscal year begins October 1, 2027. Board decisions on rates are usually made in August.

Limitations

We relied on TVA’s own announcement and on news reports about the data center rate. We did not review individual local power company rates, and we did not verify past TVA increase percentages or current solar terms.

Sources

• TVA, “TVA Board Protects Consumers, Strengthens Reliability Amid Rising Power Demand,” Aug. 20, 2026
• Fox 17 Nashville, “TVA proposes new data center power rate starting in October, with 10% average increase”
• Fox 13 Memphis, “TVA votes to raise rates two years in a row,” 2024