American Electric Power’s Ohio utility is asking state regulators to create new tariffs forcing data center developers to pay for 90 to 95% of their projected electrical demand for their first decade of operation, even if they use less (24-0508-EL-ATA).

AEP Ohio filed the application with the Public Utilities Commission on May 13. Utility President Marc Reitter said in a news release that the company needs that level of commitment to make the investments required to supply the power-intensive facilities being planned in large numbers in its territory, particularly Central Ohio. 

The proposals would apply to new data centers with a maximum monthly demand of at least 25 MW at a single location or mobile data centers, such as cryptocurrency mining operations, with a maximum monthly demand of at least 1 MW. Data centers that already have signed agreements with AEP at the time the proposed tariffs took effect would be subject to its existing general service tariffs, at least initially. 

According to its filing, AEP’s peak demand in Central Ohio is approximately 4,000 MW, and it has signed binding electric service agreements for 5 GW of new data center load to come online by 2030. But more than 50 customers have submitted requests reserving over 30 GW of additional load. 

“AEP Ohio’s current tariffs were not designed to address (and did [not] contemplate) either the current growth curve based on hyperscale data center development or the unique demands for serving this new class of data center customers,” it said. 

There is also no RTO-controlled generation in Central Ohio, so AEP must import power over the 765-kV backbone system. Using existing transmission, the company will be able to import enough power to serve the new data centers with the 5 GW it has committed to, but serving additional data centers would require construction of new lines at great cost and time, it said: 120 miles of 765-kV line would take seven to 10 years and hundreds of millions of dollars to build. 

In March 2023, AEP imposed a temporary moratorium on data center service requests in Central Ohio so it could analyze the likely impact of future data centers. It will keep the moratorium in place until its proposal is resolved. 

The utility argued in its filing that state law requires it to serve all customers in its service territory, but not in a way that would be unreasonable or impose unjust risk for the company or its other customers. 

Data centers would be billed for the greater of 90% of their contracted capacity or the highest previously established billing demand in the preceding 11 months. That would increase to 95% for mobile data centers.  

The proposed tariffs would also: 

• • require contracts for an initial term of at least 10 years; 
  • include an exit fee for customers that leave early; 
  • impose security and collateral provisions determined by AEP to protect against customer bankruptcy or other failure to meet financial commitments; 
  • impose technical requirements such as a ban on intentionally or unintentionally cycling load in a way that unbalances system frequency; and 
  • mandate participation in the PJM Emergency Demand Response Program and in any emergency event declared by AEP Ohio, with potential service disconnection if the customer does not respond. 

In its request, AEP said it expects data centers to hold at least the top five spots on its list of largest customers by 2030. 

“AEP Ohio has helped the state of Ohio attract thousands of new jobs and billions of dollars in investment because over the decades, AEP has built an extensive network of transmission lines to deliver the power these customers need,” Reitter said in the company’s statement. “This is one of the reasons data center developers targeted Central Ohio, and they continue to request large amounts of power. We need to ensure they can follow through with their commitments as significant new investments are made to serve them.”