CCU Defers Serverfarm Electric Service Agreement Pending Final Review; Commissioners Choose Regulatory Demerit Over Approving Contract Before Final Details Are Complete

By Editor | July 7, 2026 |

LOCAL GOVERNMENT COVERAGE – CLARKSVILLE CONNECTED UTILITIES – DATA CENTER

by Megan Wylie

The Clarksville Connected Utilities Commission voted Tuesday, June 30, to defer action on a proposed Electric Service Agreement (ESA) with Serverfarm until negotiations are complete and the Commission can review the final agreement before deciding whether to authorize its execution.

The decision means CCU expects to receive a regulatory demerit because the ESA was not executed before the June 30 deadline established by the Southwest Power Pool (SPP). SPP will proceed with filing the results of its six-month facilities study with the Federal Energy Regulatory Commission (FERC), including the transmission upgrades it determined are necessary to serve the first phase of the proposed data center project.

Commissioners said they were unwilling to approve the agreement, or authorize Interim General Manager Eric Heinrichs to sign it later, until they could review the final document and confirm it contains provisions intended to protect the utility and its customers.

More than a dozen members of the public attended the meeting, with several speaking during public comments. Residents expressed concerns about what they said were potential impacts of the proposed data center on electric reliability, water usage, the environment, noise and public health, as well as the amount of information that has been made available about the project.

Nearly every speaker asked Commissioners to delay any decision until after a public informational meeting scheduled following the Clarksville City Council meeting on July 13, where elected officials have been invited to answer questions submitted by the public.

Additional Negotiations Needed

Heinrichs told Commissioners negotiations between Serverfarm and CCU, through CCU attorney Jason Carter, are continuing and likely require another week or two to finalize the ESA.

He explained the agreement follows completion of SPP’s required six-month facilities study, which identified approximately $15–20 million in transmission upgrades necessary to ensure the regional electric grid can reliably serve the first phase of the proposed data center without negatively affecting existing customers.

He said he could not recommend approving the remaining agreements on the agenda, a Contribution in Aid of Construction (CIAC) agreement and a Network Integration Transmission Service Agreement (NITSA), because the ESA must first establish Serverfarm as a CCU customer.

Rather than asking the Commission to approve the agreement in concept and authorize him to sign it once negotiations were complete, Heinrichs recommended bringing the finalized agreement back for Commission approval, telling Commissioners, “I am not comfortable signing the final version without the Commission’s approval.” The Commission agreed, choosing to defer action instead of delegating signing authority.

The agreements under consideration are part of a framework the City has been developing for the proposed data center over the past several months. In March, the Clarksville City Council approved an oversized demand electric service rate establishing a separate rate structure for customers with exceptionally large power demands. Under that rate structure, market, transmission and generation costs associated with oversized-demand customers are intended to be paid by those customers rather than existing CCU ratepayers.

The three agreements each serve a different purpose. The ESA establishes Serverfarm as a CCU customer and defines the utility relationship for the project’s first phase. The CIAC establishes how Serverfarm will provide funding in advance and reimburse CCU for project-related infrastructure costs, ensuring the utility does not front construction expenses. The NITSA, executed with SPP, governs the regional transmission service and transmission upgrades required to serve the project’s electrical demand. Because the agreements are interdependent, the NITSA cannot be finalized until the ESA and CIAC are completed.

Tuesday’s discussion focused on the next step in that process, ensuring the legal agreements implementing that rate structure also require Serverfarm to pay for transmission upgrades and other project-related costs while protecting CCU from financial liability.

Protecting CCU From Project Costs

Much of the discussion centered on ensuring CCU would not become financially responsible for transmission upgrades required to serve the proposed data center.

Commissioner Jason Shook explained the deadline was established by SPP, which determines what transmission upgrades are necessary to maintain the reliability of the regional electric grid.

He said SPP will file the results of its facilities study with FERC regardless of whether the ESA has been signed. The study identifies the transmission upgrades SPP determined are necessary to reliably serve the first phase of the proposed data center project, and because the agreement was not executed by the deadline, CCU expects to receive a demerit.

However, Shook said Commissioners were unwilling to let the deadline pressure them into approving an agreement before they were satisfied Serverfarm would bear all project-related costs. “I’m not comfortable saying we’re going to take on the liability of SPP’s proposal when we don’t have Serverfarm on the hook for this,” he said.

He explained the CIAC and NITSA describe how Serverfarm will reimburse CCU for required infrastructure improvements, while the ESA establishes Serverfarm as a customer under the oversized demand electric service rate approved earlier this year. Together, the agreements are intended to ensure costs associated with the project are borne by the data center rather than CCU or its existing customers.

Heinrichs agreed, explaining the agreements are designed to protect CCU if the project does not move forward. “It’s a mechanism for us that covers us and not holding the costs in the end if that were to happen,” he said.

He reiterated the upgrades identified through the SPP study were determined by SPP to mitigate potential impacts to the regional electric grid as electrical demand increases over the coming years.

Commission Says Responsibility Is Protecting Customers

Throughout the discussion, Commissioners said they also have unanswered questions about the project.

They noted they are also members of the community, customers of the utility and have families and/or businesses in Clarksville, and said their responsibility is ensuring the agreements protect CCU and its ratepayers.

Shook said the Commission’s role is limited to evaluating the utility agreements, telling those in attendance, “We’re looking at this from the standpoint of safety. We don’t have the authority to reject the project.” He explained authority rests with the Clarksville City Council, while the Commission’s responsibility is ensuring utility agreements protect CCU and prevent project costs from being passed on to local customers. Commissioners also emphasized approving the ESA would not determine whether the proposed data center ultimately receives electrical service, but rather would establish the contractual relationship governing service should the project proceed.

Commissioner Ethan Powell said the Commission has a responsibility to prepare the utility for future customers while protecting it from financial risk. “We have to protect this business (CCU). We have to be prepared for a customer, protect ourselves from any future liabilities the best we can to make sure service is complete for everyone.”

Chairman LaShainea Pollander said protecting customers is central to every decision the Commission makes. “We are also customers in this community too,” she said. “We never sign anything without it saying ‘what’s the cost to the customer’ behind it.”

Heinrichs added public power exists to serve its community and protecting customers remains the Commission’s priority.

Questions Continue After Meeting

Following adjournment, Heinrichs thanked those in attendance for participating in the process and exercising their rights as citizens. Commissioners then remained to answer additional questions from residents about the approval process and whether the agreements could be delayed until after the July 13 public meeting.

Shook said he could not promise the Commission would wait until after that meeting because SPP continues to operate on its own regulatory timeline. He said the Commission hopes to avoid additional demerits from FERC but will not allow those deadlines to force approval of an agreement before Commissioners are satisfied the final document protects CCU and ensures Serverfarm is responsible for all project-related costs.

He also emphasized the Commission intends to continue conducting its work openly, saying, “My goal was just transparency here. I have every reason, just as many of you, to know what’s going on and how it’s affecting” the community.

Powell added while CCU does not have the authority to determine whether the proposed data center ultimately receives electrical service, the Commission does have a responsibility to ensure any agreements governing that service are structured responsibly, protect the utility and its customers, and prepare CCU to serve the customer if the project proceeds.

The Commission took no action on the ESA, the CIAC agreement or the NITSA. Heinrichs said another special meeting could be scheduled once the remaining details of the ESA have been finalized so the Commission can review the completed document before deciding whether to authorize its execution.

(For more in depth information on each of the agreements and their purposes, see the CCU story on Page 1 of the June 24 edition of The Graphic or on thegraphic.org.)