TVA dismisses community concerns, approves power agreement for controversial xAI facility

MURRAY, Ky. — Today, the Tennessee Valley Authority Board of Directors agreed to supply power to a South Memphis data center run by xAI, a company founded by Elon Musk. Board members approved xAI’s application despite significant concerns that the facility will strain the federal utility’s power grid and that it is already worsening air quality in predominantly Black neighborhoods nearby.

“The ongoing policy violence that allows xAI to continue the consistent damaging of our lungs in Southwest Memphis is immoral, we deserve clean air, not silent strangulation,” KeShaun Pearson, President of Memphis Community Against Pollution, said. “The TVA board must do its job to sustainably serve its community and study the environmental implications of giving xAI an additional 150 megawatts of power in an already energy burdened & over polluted community of people whose lives have been sacrificed for generations.”

The xAI facility powers X’s – formerly known as Twitter – AI chatbot, ‘Grok,’ and began operations this summer. Initially, the company planned to use 150 megawatts of electricity, enough to power more than 100,000 homes. Recently, Musk has said he plans to double the facility’s computing power by the end of 2024, and it has been reported that the facility’s energy use will also double.

The massive power demands raise concerns about the reliability of TVA’s power grid and the utility’s massive, costly construction of new gas plants to power data centers at ratepayer expense. At its meeting in August, TVA approved nearly 500 megawatts of new industrial load. TVA has also raised electric rates twice in the past year to build dirty gas plants that the utility claims will address increasing demand for power, partly from data centers.

“We are alarmed that the TVA Board rubberstamped xAI’s request for power without studying the impact it will have on local communities,” Amanda Garcia, senior attorney at the Southern Environmental Law Center, said. “Last year, TVA questioned power reliability and proposed a new dirty gas plant in South Memphis, and today Board members expressed concern about the impact large industrial energy users have on power bills across the Tennessee Valley. TVA should be prioritizing families over data centers like xAI.”

In order to meet its enormous energy needs, xAI has been running unpermitted gas turbines on site. These turbines pump out hazardous chemicals like formaldehyde and worsen ground level ozone, better known as smog. The emissions add to already persistent air pollution problems in South Memphis and can cause respiratory problems in nearby communities. xAI has not committed to stop running the turbines after being connected to TVA’s grid.   

“Selling electricity to the highest bidder without any concern for negative impacts on low-wealth and people-of-color neighborhoods should not be how TVA operates. When there are negative or dangerous impacts, the precautionary principle should be considered to safeguard already vulnerable people,” Rita Harris, Chair of the Sierra Club Chickasaw Group, said.

“As a Black woman raised in South Memphis with lifelong asthma and reproductive health issues, I am disappointed that the TVA Board approved xAI’s proposal in its current form. TVA should be holding xAI accountable to ensure it is conducting safe and healthy business, not contributing to more illness and despair in an historically Black and redlined community.” LaTricea Adams, President of Young Gifted and Green, said.

Approval from the TVA Board is required for industrial customers using more than 100 megawatts of power. It is the latest step in a process around xAI that has been criticized for happening behind closed doors and out of the public eye. Even Memphis City councilmembers were caught off guard when the facility was announced in June, and it has been reported that some city officials signed non-disclosure agreements with xAI.