CCU Considers Data Center Agreements, Transmission Deal; Schedules June 29 Special Meeting

By Editor | June 23, 2026 |

UTILITY COVERAGE – CLARKSVILLE CONNECTED UTILITIES- SUBSCRIBER EXCLUSIVE

by Megan Wylie

Clarksville Connected Utilities (CCU) Commissioners on Monday, June 22, reviewed draft agreements outlining utility service commitments, construction funding structure and transmission responsibilities for the proposed Serverfarm data center project, which represents a large-scale industrial power load requiring regional transmission coordination and infrastructure buildout.

The agreements are required to advance regional transmission filings tied to the project’s first phase. Commissioners did not take final action on the agreements during Monday’s meeting, instead scheduling a June 29 special meeting to consider final versions following legal review and ahead of a June 30 transmission filing deadline.

The agreements function in sequence, with the Energy Service Agreement (ESA) establishing Serverfarm as a CCU customer, the Compensation in Aid of Construction (CIAC) outlining a framework requiring the developer to fund infrastructure costs upfront and reimburse construction expenses, and the Network Integration Transmission Service Agreement (NITSA) governing regional transmission service requirements with the Southwest Power Pool (SPP). The NITSA cannot be executed until the ESA and CIAC are finalized.

All three agreements operate under the city’s oversized demand electric service rate adopted in March, which requires large-load customers to pay all incremental costs associated with serving their demand, including infrastructure and transmission upgrades.

ESA Defines Proposed Utility Relationship

Commissioners reviewed the ESA with Serverfarm, the company developing the Clarksville data center, which would establish the formal utility-customer relationship between CCU and the project.

Interim General Manager Eric Heinrichs said the ESA serves as the foundational document required before additional agreements can move forward.

According to Heinrichs, initial work on the project began in 2022 through efforts led by John Vaughn of Vaughn Property Group to build relationships and lay the groundwork for a potential data center development in Clarksville. Serverfarm became involved in 2024 and is expected to ultimately own, operate and maintain the facility.

He told Commissioners no formal utility-customer agreement had previously been executed between CCU and Serverfarm.

The 15-year ESA outlines responsibilities, facilities, service schedules and costs associated with providing electric service for the first 318 megawatts (MW) of projected load in phase one of the project. Heinrichs reported additional phases would require future amendments as the project progresses.

Approval of the ESA is required before related agreements, including the CIAC and NITSA, can be finalized.

A member of the public, Debbie Hobbs, addressed Commissioners during the meeting, saying she is concerned about the data center project “like many people.” She questioned potential costs to CCU customers and raised concerns about Commissioners reviewing agreements before final versions were completed.

Heinrichs reiterated CCU’s position remains neither the utility nor local ratepayers will assume financial risk for the project, with those responsibilities remaining with Serverfarm.

Commissioner Jason Shook emphasized the structure of the agreements, saying, “At every point it says ‘at sole cost to the customer (Serverfarm),’ so by entering into this we will be defining Serverfarm as a customer and stipulating that any and all costs must be paid for by them.” He added this includes transmission lines, substations and the 318-MW service requirement tied to the SPP process.

Additionally, Heinrichs said he was seeking direction from the Commission on how they preferred to handle final approvals, noting the agreements must be executed before June 30 to meet transmission-related deadlines. He said the structure is intended to ensure Serverfarm remains responsible for costs associated with serving the project.

Later in the meeting, the Commission decided it will consider final approval of the ESA, CIAC and NITSA at the June 29 special meeting following legal review.

CIAC Outlines Funding Structure For Construction Costs

Commissioners also reviewed the CIAC, which establishes how project-related infrastructure construction costs will be funded and reimbursed.

Heinrichs said the CIAC would replace a series of individual reimbursement arrangements previously used for studies and engineering work. CCU has been reimbursed for all project-related expenses to date.

Under the proposed structure, Serverfarm would fund approximately 90 days of projected construction costs in advance, with expenses reconciled every 30 days and updated forecasts issued for the following funding period. CCU would not front any construction costs.

Commissioners were told the CIAC is intended to ensure all infrastructure work tied to the project is paid for by the developer, consistent with the oversized demand rate framework.

Transmission Agreement Tied To Regional Study

Commissioners also reviewed the NITSA with the SPP, the regional transmission organization serving Arkansas and surrounding states.

Heinrichs said SPP initiated a transmission study in December 2025 to evaluate the impact of the proposed data center load and identify system upgrades needed to maintain reliability.

The agreement would govern long-term transmission service through Dec. 31, 2043, and outlines upgrade costs and obligations tied to serving the project’s projected electrical demand.

Commissioners were told CCU’s obligations include approximately $2.38 million in transmission infrastructure upgrades, about $1.49 million in revenue requirement charges and roughly $179,500 in directly assigned charges over varying terms.

The agreement also identifies required upgrades involving multiple regional facilities, including 161-kilovolt (kV) and 69-kV lines and transformer assets connected to the SPP system.

Attachment materials show more than 360 MW of network resources supporting projected load, including existing power purchase agreements and other listed resources.

Heinrichs said the NITSA must be executed before SPP files it with the Federal Energy Regulatory Commission (FERC) by June 30. He said failure to execute would not stop the project but could result in a compliance demerit for CCU.

Easement Guidelines And Acquisition Items

Commissioners reviewed updated easement compensation guidelines that had not been revised in more than 10 years but voted to table the item for further refinement.

Heinrichs said additional work is needed to update cost structures ahead of anticipated easement acquisitions tied to transmission and utility construction for the project.

The guidelines establish standardized payment ranges for utility easements based on property type, easement width and land classification, along with a minimum payment per parcel.

In a separate action, Commissioners approved hiring Throughline to manage easement and right-of-way acquisition for approximately four miles of new 161-kV transmission line and about 50 individual easements required for the project.

According to documentation, the work will connect the North Substation, East Substation and the data center site along existing utility corridors.

Heinrichs said Serverfarm plans to begin easement acquisition efforts in early July, and the contract is expected to be funded through the CIAC.

He said the firm was selected from three candidates based on qualifications and available resources.

The agreement will return to the Commission for final approval following review by Serverfarm.

Other Matters

–Heinrichs said the PCA software system is on track and issues have been resolved. He said the first wave of credits was processed this month.

Commissioner LaShainea Pollander asked about credits for former customers. Heinrichs said CCU identified approximately $5,000 in credits owed to former customers. Finance Officer Dana Frizzell said notices will be sent to verify account information and determine refund eligibility.

Heinrichs said direct contact with former customers would be the most effective way to resolve outstanding credits, and encouraged individuals to contact the CCU business office.

Financial

Frizzell presented the April financial report. Compared to April 2025, operating revenue increased 9.62%, with gains in electric, water, sewer and broadband services. Power purchased rose 15.02%, other direct expenses decreased 7.11%, and general expenses increased 13.63%.

Total income for the month increased by $522,026 with departmental results as follows:
— electric: $292,515
— water: $177,569
— sewer: $47,648
— broadband: $4,294

Total disbursements for May were $1,791,831.23.

Present at the meeting were Pollander, Freeman Wish, Shook, Blake Neumeier and Ethan Powell.

The next regular CCU Commission meeting is scheduled for July 27 at 4:30 p.m. at the CCU business office, 400 W. Main St. A special meeting is scheduled for Monday, June 29, with the time to be determined, which will be announced on the CCU Facebook page. All meetings are open to the public.