GAHANNA, Ohio, October 23, 2024 – AEP Ohio, an American Electric Power (Nasdaq: AEP) company, today filed a settlement agreement that addresses the extreme power needs of Ohio’s growing data center industry while protecting AEP Ohio’s other customers. The staff of the Public Utilities Commission of Ohio, the Ohio Consumers’ Counsel (OCC), the Ohio Energy Group (OEG), Ohio Partners for Affordable Energy, and Walmart joined AEP Ohio in the filing.
“Ohio’s economic success in bringing data centers to our state comes with immense demands for electricity, and we have to meet those efficiently and responsibly,” said Marc Reitter, AEP Ohio president and chief operating officer. “The agreement insulates our other customers – including residents, small businesses, manufacturers and other industries – from the impact of the necessary infrastructure improvements. Our goal throughout this process has been to provide customers with protections, while keeping Ohio an attractive place to run and grow a business. This proposal provides that balance and was developed with PUCO staff and consumer advocates. I’m grateful for the hard work of all of our stakeholders.”
This agreement, which is subject to review and approval by the PUCO, requires large new data center customers to pay for a minimum of 85% of the energy they say they need each month – even if they use less – to cover the cost of infrastructure needed to bring electricity to those facilities. It also creates a sliding scale that allows small and mid-sized data centers more flexibility. And it requires data centers to provide proof they are financially viable and able to meet those requirements, as well as to pay an exit fee if their project is canceled or unable to meet the obligations outlined in the electric service agreement contract.
The requirements would be in place for up to 12 years, including a 4-year ramp-up period.
The agreement also outlines a process to end the moratorium on new Central Ohio data center agreements.
The settlement filed today by AEP Ohio, PUCO staff, the Ohio Consumers’ Counsel, OEG – a manufacturing coalition – and others is the latest in PUCO case no. 24-508-EL-ATA. The case began in May 2024, when AEP Ohio filed a proposal to reconcile the costs of infrastructure improvements required for Ohio’s growing data center industry.
Earlier this month, a group of data center industry leaders filed a separate agreement, which was not supported by AEP Ohio, the PUCO staff, OCC or OEG. They proposed to pay for a minimum of 75% of the energy they say they will use and excluded important customer protections and included other problematic provisions in their deal.
Data center development has expanded rapidly in recent years across AEP Ohio’s service territory, especially in Central Ohio. Electricity demand in Central Ohio, driven largely by data centers, already is expected to more than double by 2030.
“Our proposal recognizes the importance of data centers, not only to our region and Ohio’s economy, but to the country at large,” Reitter said. “We welcome the incredible investment large data centers are making in Ohio. Our agreement strikes a balance between the costly investments required for high-powered cloud and AI needs and protections for AEP Ohio’s other customers.”