Facing a historic spike in electricity consumption from central Ohio's fast-growing cluster of data centers, a local utility company has asked state regulators to make its most power-hungry customers get "more skin in the game," according to a testimony from a filing.
In the filing on May 13, AEP Ohio asked the state's public utilities commission to approve its proposals to create a new customer class and a set of tariffs specifically for data centers. It says these proposals will protect its other customers from rising rates and diminished service and ensure the Ohio electric grid's ability to serve future economic development projects amid unprecedented demand for new service connections.
In the filing, AEP Ohio, a subsidiary of American Electric Power, disclosed that it had recently received an unanticipated 30,000 megawatts of new service requests from data centers, cryptocurrency mines, and mobile data centers — containerized data centers that have the same infrastructure as traditional ones but can be moved to different locations.
Those 30,000 megawatts don't include the 5,000 megawatts of demand, also from data centers, that AEP already has in contract through 2030 — an amount that, once installed, would raise the electricity demand of the Greater Columbus region close to New York City's.
The tariffs AEP has proposed would require new data-center customers to commit to at least 10 years in its service territory and to pay an "exit fee" if the contract is breached. Data centers would also have to commit to paying for — at a minimum — 90% of the electricity they originally contracted for, even if they don't end up needing it.
Marc Reitter, the president and chief operating officer of AEP Ohio, told Business Insider the tariffs were designed to ensure the company's other ratepayers and other electricity users wouldn't end up footing the bill for new transmission lines required to fulfill the enormous amount of data-center demand. He added that AEP Ohio served about 1.5 million customers in the state.
"This is going to require a lot of transmission infrastructure," Reitter said. "We need certainty for planning these large investments that take a lot of time and cost a lot in the context of these commitments."
Reitter added that any expansion beyond the 5,000 megawatts AEP Ohio had contracted through 2030 would require new transmission infrastructure crossing state lines. BI has previously reported that the cost of interstate transmission construction is often spread across a large number of customers in multiple states — even if those customers aren't the primary beneficiaries of the new transmission lines.
Reitter said another concern was ensuring Ohio could continue to attract economic development agreements with other industries. While data centers can act as anchor tenants that attract other tech companies to cluster in the area, the energy they consume is disproportionate to the number of jobs they create for the local economy.
In its filing with state regulators, AEP Ohio says that since 2019, its non-data-center commercial and industrial customers have, on average, created about 25 full-time jobs per megawatt of electricity consumption. On the other hand, data centers have created roughly "less than one" full-time job per megawatt of energy consumed, the filing says.
AEP Ohio's new service queue has been paused since March while the company assesses its response to the 30,000 megawatts of requests from data centers.
"We believe some of that queue is speculative, but we want the real customers and counterparties to commit to Ohio," Reitter said. "At the same time, we are trying to protect ratepayers. It's a balanced approach that we feel facilitates economic development and keeps Ohio open for all businesses."
Some states, including Ohio, have a statute that allows power companies and data centers to seek approval for agreements that give the data centers heavily discounted electricity. The new data-center tariffs wouldn't prevent data-center customers from continuing to seek those discounts, which a state's public-utilities commission must approve, Reitter said.
"I have no idea what the future holds with respect to customers and their interests to file under that statute," Reitter said, "but it's our responsibility to engage in that process."
