Ohio has quickly become a top state for data centers. Because data centers use lot of electricity, many customers have questions about AEP Ohio’s role. Who figures out how much electricity they need? Is there enough power to serve them? Are existing customers paying for new infrastructure?
The answers begin with understanding what AEP Ohio does and doesn’t do.
Who decides how much electricity they need?
Data centers are physical structures that make the modern digital world possible — storing and processing information that enables everything from online banking, electronic medical records and video streaming to cloud computing, national defense and artificial intelligence.
Like every electric utility in Ohio, state law requires AEP Ohio to provide electric service to customers within our service territory. Whether the customer is a home, a small business, a manufacturing plant or a data center, our responsibility is the same: safely deliver reliable and affordable electricity. Just like with our other customers, AEP Ohio does not recruit, develop, own or run data centers.
When a company wants to build a data center, the customer — not AEP Ohio — decides how much electricity they will need based on the project’s purpose and design. That information is the starting point for AEP Ohio’s engineers and planners.
Our staff evaluates the request, completes detailed engineering studies and finds the best way to serve the facility. Those studies make sure the existing electric system has enough capacity and tell us when new substations, transmission lines and other infrastructure is needed.
Is there enough power to serve them?
Before answering that question, it helps to understand how AEP Ohio delivers electricity to your home or business.
AEP Ohio is a regulated, wires-only electric distribution company. By law, we do not and cannot own or run power plants, and we do not generate electricity. Our job is to use our network of substations, poles, wires and other equipment to deliver the electricity generated by power plants, wind farms and other suppliers.
Some large customers, including some data centers, choose to build their own on-site generation to help power their operations. Whether a data center draws its power from the electric grid, on-site generation or a combination of both, AEP Ohio is still responsible for ensuring the local electric distribution system serves all customers safely, reliably and affordably.
As we review requests for new service, AEP Ohio shares the amount of electricity the customers say they need with PJM, the regional organization responsible for planning and coordinating the high-voltage transmission grid across 13 states and the District of Columbia. PJM uses information from all electric utilities in the region to make sure there are enough transmission resources and power supplies to meet future demand.
Simply put, AEP Ohio’s role is to understand our customers’ needs, work out how to serve them safely and reliably, share that information regionally and manage the local poles and wires needed to deliver electricity.
Are residential customers paying for new infrastructure?
Several years ago, data center developers began requesting an unprecedented amount of electricity for new projects. AEP Ohio recognized that traditional regulations and pricing structures weren’t designed for this amount of growth at such a fast pace. To protect our other customers and better align infrastructure planning with actual demand, AEP Ohio developed its Data Center Tariff. This framework was one of the first of its kind in the nation and has become a model for utilities, regulators and policymakers across the country.
The Data Center Tariff set up a structured process that requires data center customers to make significant financial and contractual commitments before we build infrastructure to serve them. It also requires engineering studies, proves the customer’s financial health and protects other customers if projects are canceled or significantly delayed.
This approach helps ensure that actual projects drive infrastructure investments and that the costs of serving these large customers are assigned fairly. It helps AEP Ohio plan responsibly while protecting existing customers and supporting Ohio’s continued economic growth.
Our role is simple
As new businesses invest in Ohio, AEP Ohio’s responsibility is the same as it has been for over a century — safely providing reliable and affordable electric service to the communities we call home.
That means applying sound engineering, planning infrastructure responsibly, coordinating with regional grid operators and ensuring our electric distribution system is ready to meet today’s needs and tomorrow’s growth.
