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AEP files proposal to handle surging data center development in Ohio

The proposed rate structure would implement financial conditions for data centers 25 MW or larger.
AEP files proposal to handle surging data center development in Ohio
(Data Center photo. Courtesy Microsoft.)

American Electric Power (AEP) has filed a proposal with the Public Utilities Commission of Ohio that would create a new rate category for data center customers and cryptocurrency mining/mobile data center operations.

The proposed rate structure would require new data centers with loads greater than 25 MW and cryptomining/mobile data center operations with loads greater than 1 MW to agree to meet certain requirements before infrastructure is constructed to serve them.

Under the proposal, data centers would be required to make a 10-year commitment to pay for a minimum of 90% of the energy they say they need each month – even if they use less.

Adding additional large energy users requires investment in new transmission lines, which can take 7-10 years to plan and construct. AEP Ohio said this new rate structure would provide the utility with the certainty needed to develop long-term plans and offers data center and cryptocurrency mining customers “a clear understanding of their obligations as customers.”

“While we see no concerns serving current or new residential and existing commercial or industrial customers, we need to ensure that the right long-term investments are made to the electric grid,” said Marc Reitter, AEP Ohio president and chief operating officer. “We need accurate plans and solid commitments from large data center customers so the right facilities are built at the right time.”

Demand for computing power from data centers, fueled by artificial intelligence and other new technologies, requires enormous amounts of power. Ohio is seeing unprecedented demand from data center customers, especially in the central part of the state.

According to AEP testimony to state regulators, data center load is expected to reach a total of 5,000 MW in Central Ohio by 2030, based on signed agreements with the company. As of April 2024, actual data center load was approximately 600 MW in Central Ohio.

The Buckeye State is not alone. In the U.S., data center demand is expected to reach 35 GW by 2030, up from 17 GW in 2022, McKinsey & Company projects. Grid operators and utilities are projecting significant load growth driven by electrification, new manufacturing and data center development. 

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