That approval came despite concerns from Memphis area residents and environmental advocacy groups over how the artificial intelligence company’s water and electric consumption needs could further pollution issues in the southwest Tennessee area.
xAI’s power contract is with Memphis Light, Gas & Water (MLGW), the federally-owned utility company’s largest power customer. TVA CEO Jeff Lyash said it has to meet its power companies’ needs, and could not deny MLGW’s request.
“We have an obligation to serve, so our answer will always be yes, but it can be conditioned by when, and under what conditions,” Lyash said after Thursday’s meeting.
Lyash said one of those conditions includes requiring xAI to develop a demand response program to reduce its energy load during peak consumption times so that the TVA doesn’t reduce the overall reliability of its system.
“xAI came to the table and committed to install mega pack batteries and demonstrate the ability, when the facility is complete, to be able to curtail their load on a 30 minute request from TVA,” Lyash said.
Some TVA board members brought up concerns about how xAI could impact the Memphis area’s environment. One member, Beth Geer, said the utility should be charged with making sure that broader pollution concerns are addressed with regards to the project.
“I strongly encourage TVA to do everything within its power, including continuing to work with MLGW and area industries, to advance clean water solutions to reduce pollution burdens and to support the health and well being of our neighbors in Memphis,” Geer said.
The utility’s board of directors also heard updates about its energy performance over the 2024 fiscal year, as well as progress on increasing the power provider’s load capacity.
In January, during a winter storm impacting much of the southeast, TVA recorded its highest peak demand in its over 90-year history at 34,577 megawatts. Summer demand peaked at 31,096 megawatts on Aug. 29.
Lyash said more than half of the energy the publicly-owned utility produced in the last fiscal year was carbon-free. That included expanding its solar portfolio to around 4,200 megawatts, part of what he said is the TVA’s goal to expand its clean energy programs.
“When I think about our clean energy future, I think about solar, battery storage, advanced nuclear and other technologies that will develop to unlock them in the years to come,” Lyash said.
The board also heard about TVA’s response to Hurricane Helene – especially in its eastern Tennessee coverage area. The utility estimates that its flood mitigation strategies prevented over $400 million in potential damages.
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