Ohio regulators have reaffirmed a controversial pricing plan aimed at the state’s surging data center market, rejecting pleas from Amazon and other hyperscalers and setting up a likely court battle over who pays for the grid build-out driving Ohio’s digital economy.
The move has far-reaching implications: at the center of the citizen pushback against the huge data center buildout—impacting communities across the US—is the issue of which party pays for the increased electrical demand. In many situations, residents pay a hefty share, as the law of supply and demand boosts prices for everyone. Ohio regulators are attempting to reverse this situation and force data center owners to shoulder a larger financial burden.
The stakes are considerable. Central Ohio’s data center boom has quickly become one of the most aggressive load growth stories in the country. Utility company AEP testified that in 2023, central Ohio accounted for roughly 4,000 MW of the state’s roughly 9,400 MW peak, and by 2030 the utility has signed agreements for another 4,000 MW from data centers alone, with an additional 30,000 MW of proposals in the queue.
Shifting the Burden to Data Centers
In an early September ruling, the Public Utilities Commission of Ohio (PUCO) denied applications for rehearing and let stand its July order allowing AEP Ohio to bill data centers a minimum of 85% of their highest forecasted electricity use, even if their actual consumption falls short. The minimum charge—an 85% “billing demand” floor—replaces a 60% threshold historically applied to data centers and other large industrial users.
PUCO said the rehearing bids largely re-argued issues already decided. “Mere disagreement with the Commission’s ultimate decision is not appropriate grounds for rehearing,” the order stated. As of September 17, no appeal had been filed at the Supreme Court of Ohio, though the parties have 60 days to do so.
AEP framed the tariff as a much needed fix, a way to ensure the specialized network needed to serve data center campuses is funded by the facility owners driving it. PUCO agreed, concluding that data centers’ “actual, material differences” justify a separate tariff and that a more stringent minimum demand better aligns revenues with build-out risk.
Tech firms and manufacturers counter that the policy is discriminatory and overbroad. Amazon Data Services and the Data Center Coalition argued the commission hadn’t required rigorous studies to prove the tariff will accurately allocate costs. The Ohio Manufacturers’ Association called the decision a “slippery slope” and signaled it would appeal, warning that overstated and double-counted demand projections could saddle industry with unnecessary charges.
Consumer advocates, including the Ohio Consumers’ Counsel, supported PUCO’s move as a guardrail for households and non-data-center businesses. The Counsel also stressed that it will scrutinize AEP’s broader rate case amid escalating capital spending that has already boosted energy bills for Ohio families.
A Grid Under Stress
If appealed, the Supreme Court of Ohio will weigh established utility law questions: whether PUCO’s findings are supported by substantial evidence, and whether the tariff unlawfully discriminates among similarly situated customers. Additionally, it will decide how far regulators can go to proactively manage unprecedented load growth.
The court battle, if it happens, will unfold under intense pressure to keep pace with AI-era timelines. Furthermore, the result of that appeal will resonate across the country.
Policy moves at the Statehouse point to a middle ground: finding a way to reduce energy demand. Two weeks ago, Rep. Roy Klopfenstein introduced House Bill 427 to let utilities offer voluntary, residential demand-response programs. For instance, smart thermostats and appliance cycling with opt-outs and rebates.
Environmental and conservative energy groups backed the concept, and one analysis estimated potential system savings between $34.5 million and $104 million depending on participation. Taken together, PUCO’s decision and HB 427 sketch a two-track strategy for an electricity system under stress.
