Facing historic spikes in electricity consumption from a cluster of fast-growing data centers in central Ohio, a local utility company has asked state regulators to make its power-hungry customers “get more in the game.”
In a filing Monday, AEP Ohio asked the state Public Utilities Commission to approve its proposals to create a new customer category and set of tariffs specifically for data centers. It said these proposals will protect its other customers from rising rates and diminished service as well as ensuring Ohio’s power grid can serve future economic development projects amid unprecedented demand for new service connections.
In its filing, AEP Ohio, a subsidiary of American Electric Power, revealed that it recently received 30,000 megawatts of unexpected new service requests from data centers, cryptocurrency mines, and mobile data centers — containerized data centers that have the same architecture. Infrastructure such as data center. Traditional data center, but can be moved to different locations.
That 30,000 megawatts does not include the 5,000 megawatts of demand, also from data centers, that AEP has already contracted through 2030 — an amount that, once installed, would raise electricity demand in the greater Columbus, Ohio, area near the city of New York.
AEP’s proposed tariffs would require new data center customers to commit to at least 10 years in their service area and pay an “exit fee” in the event of a breach of contract. Data centers will also have to commit to paying for at least 90% of the electricity they originally contracted for, even if they don’t end up needing it.
The tariffs are designed to ensure that other corporate ratepayers and other electricity users don’t foot the bill for new transmission lines needed to meet the massive amount of data center demand, Mark Ritter, president and chief operating officer of AEP Ohio, told Business Insider. . He added that AEP Ohio serves about 1.5 million customers in the state.
“This is going to require a lot of transportation infrastructure,” Ritter said. “We need certainty to plan these large investments that take a lot of time and cost a lot in the context of these commitments.”
Ritter added that any expansion beyond the 5,000 megawatts it has contracted for through 2030 will require new transmission infrastructure that crosses state lines. Business Insider previously reported that the cost of constructing interstate transmission lines is often spread across a large number of customers in multiple states — even if those customers are not the primary beneficiaries of the new transmission lines.
Another concern is ensuring Ohio can continue to attract economic development agreements with other industries, Ritter said. While data centers can serve as anchor tenants that attract other technology companies to cluster in an 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 said that since 2019, its commercial and industrial customers outside data centers have created, on average, about 25 full-time jobs per megawatt of electricity consumption. On the other hand, data centers created roughly “less than one” full-time job for every megawatt of power consumed, the filing said.
AEP Ohio’s new service queue has been paused since March while the company evaluates its response to the 30,000 megawatt requests from data centers.
“We think some of this waiting list is just guesswork, but we want real customers and counterparties to commit to Ohio,” Ritter said. “At the same time, we’re trying to protect taxpayers. It’s a balanced approach that we feel facilitates economic development and keeps Ohio open for all businesses.”
Some states, including Ohio, have a law that allows energy companies and data centers to get approval for agreements that give data centers deep discounts on electricity. The new data center tariffs will not prevent data center customers from continuing to seek those rebates, which must be approved by the state Public Utilities Commission, Ritter said.
“I have no idea what the future holds in terms of clients and their interests that must be served under this law, but it is our responsibility to participate in this process,” Ritter said.
