This month, AEP Ohio recognized a ruling by the Public Utilities Commission of Ohio (PUCO) that addresses the power needs of Ohio’s growing data center industry while protecting AEP Ohio’s other customers.
The ruling approves a request AEP Ohio made in May 2024 to establish enhanced financial obligations that data centers must undertake to support infrastructure that serves them. PUCO staff, the Ohio Consumers’ Counsel, the Ohio Energy Group and others had joined AEP Ohio in the filing. The financial requirements are designed to protect other customers from shouldering the costs of grid improvements required to meet data centers’ energy demands.
“We are glad the PUCO agrees that it is critical to align data centers’ demand for energy with the infrastructure costs needed to support their growth in Ohio,” said Marc Reitter, AEP Ohio president and chief operating officer. “This infrastructure will support Ohio’s growing tech sector and help secure America’s data storage and processing facilities here in the U.S.”
AEP Ohio’s proposal approved by the PUCO requires large new data center customers to pay for a minimum of 85% of the energy they are subscribed to use — even if they actually use less — to cover the costs of infrastructure needed to bring electricity to those facilities. The plan creates a sliding scale that allows small and mid-sized data centers more flexibility. It also requires data center owners to provide proof they are financially viable and able to meet those requirements. The terms also include an exit fee if a project is canceled or unable to meet the obligations over the term of the electric service agreement contract.
The requirements would be in place for 12 years, including a four-year ramp-up period.
The agreement also outlines a process to end the moratorium on new Central Ohio data center agreements, which AEP Ohio had instituted to protect the grid and the company’s other customers while the PUCO considered these new rules.
“I am grateful for the collaboration of all the parties involved in this filing, which ultimately brings clarity and certainty for infrastructure planning,” Reitter said. “We are looking forward to ending the moratorium and continuing to support development of more data centers in our service territory.”
this whole article is a smoke screen to charge more money to non users. what will this data center store? i already pay twice the amount in distribution than i use on todays grid. and i get no extras from AEP and are the last to get power restored if the is a large event. thanks Jay
Why aren’t they paying 100% of the energy they “plan” to use?
Brian, this tariff with this percentage was approved by the Public Utilities Commission of Ohio. To protect our other customers, AEP Ohio originally requested 90% and the final amount was settled on at 85%. Data centers will be paying for 100% of the energy they actually use and this tariff ensures that they will pay for at least 85% of the electricity they request, even if they end up using less.
Make them pay 100% with no “ramp up period”. It is asinine that data centers would only pay 85% of their estimated use of electricity with a 4 year rump up period, it undermines the entire point of stopping people from shouldering the burden.
Why not 100% of what they plan to use? Are other customers not paying 100% of what we plan to use?
Thanks for the question, Olivia. Data centers, like other customers, will pay for 100% of the energy they use. However, if they request one amount and end up using less, they will still have to pay for at least 85% of what they requested. As an example, if they request 100 MW but end up using only 65 MW, they still must pay for at least 85 MW of power.
Why do we have to pay for improving there business? If the requirements are for them to improve there Service it shouldn’t be on us to pay for it. We are on solar and need our extra power for the winter time.
Jackie, AEP Ohio filed the tariff request to make sure the data centers paid for the infrastructure needed to support their energy needs, and to make sure those costs weren’t passed on to our other customers, including residential customers or other businesses.
What does this mean to a recent new customer?
Hi Fred. This recent ruling by the Public Utilities Commission of Ohio applies only to data centers, not to residential or other business customers. AEP Ohio filed the tariff request to make sure the data centers paid for the infrastructure needed to support their energy needs, and to make sure those costs weren’t passed on to our other customers, including residential customers or other businesses.
I agree with this ruling that data centers pay for infrastructure improvements to support large scale grid usage. This cost cannot be borne by individual households.
Surely hope these data centers are not contributing any costs to residential customers. My property tax went up $2,000 a year, My propane costs have nearly doubled and my AEP bills have risen significantly in the past few years. My wife and I are 75 years old and were very fortunate to have been able to put aside a nice retirement plan, but if these costs keep escalating it will impact our financial situation in a negative manor. We are doing well right now and do not require financial assistance but food, utilities, taxes, insurance, etc. are taking a major bite out of many aging persons budgets and it has to end somewhere!
This is positive news, at the outset. What is their percent obligation after the initial contracted 12 years? Does the 85% decrease incrimementaly or immediately and at what rate? Does the reduction then shift to the surrounding community members to offset the costs of those data centers utilization?
Hello Elena. After 12 years, assuming they are still a customer and that nothing has changed with the data center tariff, they would continue to be required to pay for at least 85% of the energy they requested. And of course they will always pay for 100% of the energy they actually use.
I think that this is needed language but needs to go further to protect and isolate patrons. A majority of rural and metropolitan Ohio residents are already struggling with the increased energy costs and businesses are being forced to absorb these costs into our bottom line when in contracts for pricing with our customers
Will any part of the cost to upgrade the infrastructure be passed on to other AEP customers?
What happens if the data center uses more electricity than estimated, will they pay that extra cost?
Hi Jacob. AEP Ohio filed the tariff request to make sure the data centers paid for the infrastructure needed to support their energy needs, and to make sure those costs weren’t passed on to our other customers, including residential customers or other businesses. The data centers will pay for 100% of the electricity they actually use. If they use less energy than expected, they will be required to pay as if they actually used at least 85% of what they requested.
We are senior citizens on a fixed income. We can’t afford all the rate hikes. All of the work in my area AEP has worked on does seem to help with less power outages. But if we keep getting rate hikes we will need to find another source of power.
How do we determine what “85% of the energy they are subscribed to use” is? How can I, a 77 year old, determine what an additional amount would be? With all the extras on delivery prices that have come about, (those amount to more than 50% of my invoices from AEP) in the past 10 years, it is difficult to make room for more expenses. Please explain what that 85% amounts to in dollars.
Eugene, this tariff applies only to data centers, not to residential or other business customers. AEP Ohio filed the tariff request to make sure the data centers paid for the infrastructure needed to support their energy needs, and to make sure those costs weren’t passed on to our other customers, including residential customers or other businesses.
Here’s a little more context: The data centers use large amounts of energy – way more than a residential house. That means they generally require new electricity infrastructure to be built to bring them the energy they say they’ll need. This ruling means that the data centers will have to make accurate estimates so those infrastructure investments are right-sized. If their investments are off and they end up using way less than they said they’d need, they’ll still have to pay as though they used more energy, to offset the infrastructure costs. If they use the same or more energy than they estimated, they’ll pay for 100% the energy they used, like other customers.
Do I get to pay only 85% of my energy costs on a ramp up schedule over 4 years, too?
Brian, like you, the data centers will pay for 100% of the energy they use. What this tariff does is ensure that they’re asking for the right amount of energy so infrastructure is not overbuilt to accommodate them. For example, if they request 100 MW of electricity but end up using only 65 MW, they still must pay for at least 85 MW.
why do I have to help pay the electric bill for a data center. I already lost all my value. on my home.who wants to buy my home now that there is a data center in my front yard.during the winter my electric bill gets up to 600, 700 dollars during the winter.now what will it be. who ever owns these data centers have billions of dollars.why are you coming after the little guy oh yea its all about the money. I think every thing you’re doing sucks.and there is nothing I can do about it. so its going to get a little harder to buy our meds, food,gas, and harder for us to live oh its all about the money. and I know you could care less.have a bad day
How does this work with solar panels which is designed to help save money on electricity ?
Hi Elva. This tariff is regarding data center customers. It does not have anything to do with residential customers or solar panels.
I am on a fixed income I do not have room for more taxes. What makes big companies think that people on Social Security can afford to pay more???
This ruling is stating that the data centers will need to pay more, not residential patrons? Am I missing something? I read this as they’re trying to push back more costs on the data centers so it doesn’t flow through into our individual bills.
That’s exactly right, Jenn.
This ruling states that data centers need to cover 85% of the costs, the other customers will cover the remaining 15%. Why should other customers cover any of it? Why should we cover costs up front? Why is it that whenever you guys want to build or expand, your customers have to pay for it? You’re not a government agency, you’re a for profit company. Get a loan to pay for your upgrades. That’s the way everyone else has to do it. You are all the same, you get your socialism up front.
Eric, data centers – like other customers – will pay for 100% of the energy they use. If they end up using less energy than they said they would use when they connected to our grid, they still must pay for 85% of it. Example: A data center requests 100 MW of energy, but ends up using only 65 MW. They still must pay for at least 85 MW even though they didn’t actually use that much.
This should have been planned before now.
The potential for more energy should have a long term goal, years in the making
Unfortunately, we the subscribers are going to bear the brunt of the costs
So this means my energy bill will increase by how much?
Bruce, this measure is designed to protect our customers. AEP Ohio filed the tariff request to make sure the data centers paid for the infrastructure needed to support their energy needs, and to make sure those costs weren’t passed on to our residential and other business customers.
As a retired fixed income, mostly social security customer how much more am I going to pay? When I retired in 2021 I budgeted $150 a month. This was more than I was paying at the time in 2021. Now my budget is near $300 a month. In four years time it has doubled.
Usage KWH has not changed much in that time frame, so what gives? Is my bill going to double again in four years while my retirement income doesn’t increase?
I’m not eligible for government programs because I’m above the poverty level to receive any benefits.
If you could let me know of a solution to this problem please let me know.
Furthermore any and all upgrades to support data centers or any businesses should not be reflected in the residential customer’s bill.
Thank you,
Jack Danison
Hi Jack, this tariff was designed to make sure data centers paid for the infrastructure needed to support their energy needs, and to make sure those costs weren’t passed on to residential or other business customers.
That’s the most automated response I’ve ever read and you completely dodged his questions and concerns. Do better for all of us. I also just called wondering why my bill had went up from in June $131.81 to July $248.57 to now in August $288.61 i used last July 1,000 kilowatts of energy to this July 1,400 kilowatts. So 400 more kilowatts is $100.00 + increase. Im not buying it not for a dollar. We are getting scammed or double charged some where I dont care what excuse you give.
Hi Curtis. The blog team does not have access to customer account information, so we can’t speak to specifics of a customer’s bill history. The best option is to contact our Customer Solutions team at 800-672-2231 so they can pull up the account. It sounds like you’ve done that, and that they have explained that usage is the primary driver of bills. Usage tends to increase in warmer months as HVAC systems work harder to maintain a home’s temperature even if you don’t adjust the thermostat.
This is terrible for your customers!!! You already price gouge us and now we have to pay for maintenance on your equipment while we have to pay for ours??? You don’t care about your consumers, you care about the almighty dollar
Tammy,
They hate socialism but they get theirs up front. Covering the costs for upgrades and expansion on our dime. Get a loan. That’s how we all have to do it.
As a consumer can I only pay 85% of my bill? That sounds like a good deal to me
Hi Dave. Like you, the data centers will pay for 100% of the energy they use. What this tariff does is ensure that they’re asking for the right amount of energy so infrastructure is not overbuilt to accommodate them. For example, if they request 100 MW of electricity but end up only using 65 MW, they still must pay for at least 85 MW.
Who pays for the infrastructure. This states they pay for 85% of expected electrical use. Assuming this is a set fee they pay in installments which would cover the cost of buying electricity but what about the cost of building and maintaining this very expensive grid? How does this in any way lower the cost of household electrical bills as it’s increased demand thus will drive up the cost to purchase electricity on the markets. Isn’t that essentially making household utilities more unaffordable? Perhaps there is something I’m missing?
Hi Susan. AEP Ohio filed this tariff request to make sure the data centers paid for the infrastructure needed to support their energy needs, and to make sure those costs weren’t passed on to our other customers, including residential customers or other businesses. It’s not a set fee. It’s ensuring they don’t ask more energy than they expect to use. For example, if they ask to be connected to the grid and say they require 100 MW of electricity, but then end up using only 65 MW, they are still required to pay as if they used at least 85 MW.
First, what happened to the lawsuit filed by the Data Center Association? Second, the 85% figure is murky. Is that ‘up front’? Do they ultimately have to pay for ‘all’ the power they consume?
Hi JW. Yes, data centers must pay for all of the energy they use. The data center tariff ensures that when they are asking to connect to our grid, they are requesting an accurate amount of power to be supplied to them. If they request 100 MW but end up using only 65, they still must pay as if they used 85 MW.
Does this mean our already high electric bills will go up as average users, or that the data centers will be responsible for paying for that 85%?
Loretta, this tariff applies only to data centers, not to residential or other business customers. AEP Ohio filed the tariff request to make sure the data centers paid for the infrastructure needed to support their energy needs, and to make sure those costs weren’t passed on to our other customers, including residential customers or other businesses. The data centers will be responsible for 100% of the energy they use. If they request more than they actually use, they still must pay for 85% of the amount they requested, even if they actually used less.
What happens after 12 years and what are the current plans to improve the infrastructure so that we don’t experience blackouts?
Ieasha, we’re always working to update and improve our infrastructure so we can provide the safe, reliable electricity our customers expect. Unless something changes with the data center tariff, the data centers would still be required to pay for at least 85% of the power they said they would use.
Why can’t AEP use their profits to cover costs? Their profits go up every year.
Maybe take a lower profit margin that would help your customers. Why should our rates go up year after year, while AEP’s profits go up over their previous years profits… Maybe board members and managers should not get a bonus while the rest of us suffer
I’d like to see a map of existing data centers, and new proposed data centers, as well as the proposals themselves. Will there be (have there been) public meetings to consider the details of such proposals?
Holly, we don’t have a list of data centers, but you may be available to find what you’re looking for by searching online. The PUCO always invites public comments and local communities may have public meetings to review proposed data centers that wish to build or open there.
I am interesting your plan.
Seems funny since you raised my electric costs by 40%, you now write to inform the public. Why don’t you become a lean company and get rid of the high salaries and help the consumer. If I wasn’t land locked, I would go elsewhere for my electric. Shameful company.
I so agree with this statement 100%.
How much will it cost the average homeowner? Last January I used 4,183 and in June I used 1,377.
Hi Leigh. This ruling by the Public Utilities Commission of Ohio applies only to data centers, not to residential or other business customers. AEP Ohio filed the tariff request to make sure the data centers paid for the infrastructure needed to support their energy needs, and to make sure those costs weren’t passed on to our other customers, including residential customers or other businesses. It has nothing to do with the number of kilowatt-hours you use.
Will their rate structure cover the cost of acquiring the new added power?
Yes, that is what the tariff aims to ensure, Freeman.
Is this going to bring electric bills down at all for just a household?? My house is all gas except for light n we live in the dark n still have 300-350 month electric bills. It’s getting g WAY out of hand!!! Homeowners are getting killed!!! Electric bill is more then my house payment.
Who pays the other 15% remaining?
Hi Lori. Data centers will pay for 100% of the energy they use. What this ruling does is ensure that they’re requesting an accurate amount of energy so that the cost of any infrastructure built to support them is the right size. For example, if a data center requested 100 MW of power, but ends up using only 65 MW, they still must pay for at least 85 MW.
I think they should pay the full 100 percent instead of the general public paying there bill for service ours is high enough already
Larry, data centers — like other customers — will pay for 100% of the energy they use. However, if they request one amount and end up using less, they will still have to pay for at least 85% of what they requested. As an example, if they request 100 MW but end up using only 65 MW, they still must pay for at least 85 MW of power. The general public will not pay for any of the energy they use.
How about make these Data Centers share the cost to build more power generation plants! We need more effective power generation to bring down the cost of the electricity.
Steve, Ohio is a deregulated state, which means that AEP Ohio cannot own generation. Generating more power to meet demand is not something we can do.
And just what do they need all these data centers for anyhow? Why are they soooo important 🤔 and on top of the list??
I am tired of aep asking for more money and puco always granting aep what they want. I thought puco worked for the consumer I guess I was wrong.
My electric bill has doubled in less than a year. I live in a 750 square foot house and am somehow paying almost 350.00 a month electric bill. There is something wrong with this picture! My mother lives In a three story house and only pays 100.00 more than I do! Stop with the rate hikes. This isn’t affordable.
Was the June rate increase of $.02 per kilowatt meant to cover infrastructure costs associated with the new data centers? If so, will the rate increase be rolled back now that the new 85% rule was passed?
Hi Pete. We’re guessing you’re referring to the generation supply increase that went into effect in June? Generation supply costs are not an AEP Ohio charge and AEP Ohio makes no profit from them. You can read more here.
Guess my comments aren’t posted. Why? Guess you do not want negative comments.
When a developer plots a lot or a subdivision or a builder gets a permit to build a house on a new lot the city providing sewer and water services charges an impact fee to cover the costs of providing more water or sewer lines and larger water and waste water plants. Likewise, many municipalities charge a general impact fee to cover the increased road construction costs driven by more resident drivers and installation of more traffic lights, and hiring more police and firemen and building more stations and buying more cars and trucks etc. etc. etc. Developers and builders have to pay upfront. So Why didn’t AEP follow this model and make the data centers pay an upfront impact fee for the additional infrastructure of lines and distribution nodes and larger generating plants and etc. that the increased power demand will require. Why should all the ratepayers fund these up front costs associated with serving this new demand? Making the data center pay 85% of their projected normal usage seems very week at the best. I think this is pretty much a deceptive sham that lets you claim you are doing something fair. MAKE THEM PAY UP FRONT LIKE NEW RESIDENTS HAVE TO.
Our electric bill is already too high and this is going to add more cost??? Our bill has been increasing over the past few years and just doubled this past month why?? Families on budgets can’t afford constant rising costs!!
We are all on fixed incomes. The tri annual update has already hit some counties in Ohio the remainder will affect many this year, property values are going up therefore taxes. This problem should have already been addressed and planned for before this. The rural counties cannot bear anymore.
Your rates are ridiculous. You still have the charge from years ago on the bills from storm damage use that. People just got hit with a 30% raise now you want more. You are greedy!!!!
AEP = Corporate Greed! We cannot afford this! You’re getting a 40% increase just so the big shots can line their pockets more! Tell the truth. How dare you force us to pay for power we’re not even using! Shame on you AEP.
I agree that this data center program is much needed. I only hope it goes far enough, and those huge mega corporations that build and operate them don’t find clever ways to get around it. I also agree with those who say consumer electric costs are rising too much. As an example, I recently contracted with a third party for electric supply at around six cents per KWH. However, when AEP’s delivery charge is added, the full cost is almost 15 cents per KWH! How can it possibly cost more than twice as much to deliver my electricity as it does to produce it? One reason I think this is so is, whenever there is a vacancy on the PUCO board, the governor nominates someone newly retired from the power industry.
This should of been planned out before building mega data centers on New Albany. There are now rumors that these plants are seeking mini nuclear power plants to be built , rumors of a transmission line to be routed from Portsmouth Ohio to New Albany which would take 3 years to complete.
Why not just seek to build a mega ton nuclear power plant in Ohio to solve the power issue for all . Would reduce costs and be more efficient.
I have been an AEP customer for more than 25 years. In that time they finally realized that if we don’t get power we don’t pay (They were not cleaning up the local trees and we had frequent power outages sometimes for 4 or 5 days). Now they want to increase their profits by catering to new customers when they are still having problems serving those already in the system.
I supply the grid with kilowatts per day (solar panels) and they have done what they can to minimize my returns. Why should I support further inroads on my reliability and costs?
Thanks for sharing this information.
Please explain how the proposal defines large, mid-size, and small data center developments?
The flexibility the scale of the development has, in terms of tariffs, under the proposal?
What is the exit fee and provide an example of how it’s accessed when a data center project is cancelled or can no longer meet its obligations under the service contract?
What is the term of the electric service contract data centers will be required to enter into?
Thank you
Tom, please visit our data center tariff page at AEPOhio.com/DCT. It covers answers to many of your questions.
Greed, plain and simple. Capitalism is great but the greed of those who are capitalizing are breaking the banks of the average household. No one cares, just pay your bill. Don’t give me some stupid saving per kilowatt hour for X amount of months, keep it that rate for everyone and never change it.
All these responses from “AEP OHIO” seem to be generated by an artificial intelligence bot, and not a very good one, either.