PUCO Order Angers Ohio Data Centers
We’ve often talked about how data centers could raise electric prices for everyone. This is why AEP Ohio filed a request to set up special tariffs for data centers. PUCO agreed with this new billing plan to help keep electricity rates for residential customers from rising. However, tech interests argue that the decision is discriminatory and unfair. And while PUCO has dismissed these, the Ohio Manufacturer’s Association (OMA) said it would appeal to the Ohio supreme court. So, what is the tariff, does it affect residential consumers, and why is OMA appealing?
Why Tariff Data Centers?
Ohio utilities deliver power to their customers over their local grid of poles, wires, and substations. But, demand is growing quickly every year because of new data centers and growing cities. What’s more is that data centers require a lot more power than most homes and businesses combined. As a result, Ohio’s utilities need to upgrade their grids to handle the expected load growth. Usually, utilities invest in these upgrades and then pass the cost on to their customers, raising electric bills.
Last year, AEP Ohio filed to set up a new data center tariff. The utility argued this tariff would shield customers from the huge costs for the high energy demands from data centers. According to AEP, the utility agreed to connect 4000 MW of power by 2030 just for data centers. It’s important to note that in 2023, 4000 MW was nearly half of Ohio’s 9400 MW peak load!
On top of this, there are another 30,000 MW worth of new projects that hope to come to Ohio.
What Is the AEP Ohio Data Center Tariff?
Under the new AEP Ohio tariff, new data centers agree to pay fees based on their expected load. They must also agree to a contract of at least 12 years. If a data center decides to pull out before the contract ends, they must pay an exit charge to pay for the connection costs. AEP explains that these terms keep them off the hook if a data center fails to go online. These new rules only applies to future data centers requiring at least 25 MW of power. Existing data centers connected to AEP‘s grid and those requiring less power are exempt for now.
As a result, PUCO agreed and greenlit the AEP tariff. The OCC also agreed with the data center costs decision to protect Ohio consumers.
OMA Appeals PUCO Decision
While tech interests appealed the ruling, PUCO denied it based on AEP Ohio’s load predictions. But OMA has called new rules discriminatory and plan to appeal to the state supreme court. They also allege that AEP Ohio may have inflated their load forecast. For this reason, they have asked PUCO to investigate the utility.
Will Data Centers Pay Higher Costs?
It’s clear that tech interests want to go online in Ohio. However, they don’t like the AEP tariff plan. So an appeal to the state supreme court is likely.
With future consumer bills in the crossfire, we’ll watch this story as it unfolds. In the mean time, you can always shop for the best energy deals in town at https://www.ohenergyratings.com.