Ohio Regulators Approve AEP’s Data Center Tariff to Offset Grid Costs

On July 9, the Public Utilities Commission of Ohio (PUCO) approved a new tariff structure proposed by AEP Ohio, requiring large data centers to pay for at least 85% of their subscribed electricity usage for up to 12 years, regardless of actual consumption. The tariff applies to new data center customers with loads exceeding 25 MW

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The approval ends a service moratorium initiated by AEP Ohio in March 2023, which paused new data center agreements in Central Ohio amid concerns about grid reliability. The utility had cited unprecedented growth in electricity demand -- projected to reach 5 GW by 2030 -- driven by hyperscale data center development.

The tariff, backed by PUCO staff and several consumer and industrial groups, also includes a four-year ramp-up period, financial assurance requirements, and exit fees. Smaller data centers will be subject to more flexible terms, and existing facilities are grandfathered unless expanded.

PUCO said the move ensures infrastructure costs are borne by those who create the demand, rather than passed on to residential or industrial customers. The Data Center Coalition (DCC) opposed the decision, warning it may deter future investment and calling for a more flexible, market-aligned approach.

The decision comes as other states -- including Georgia, Texas, and California -- roll out their own frameworks to manage large load integration in response to rising AI and data center-driven demand.

Source: powermag.com