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Utility Proposal Would Require 10-Year Payment Commitment from Data Centers

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 — under a proposal filed by an Ohio utility in May with state utility regulators.

AEP Ohio, an American Electric Power company, filed with the Public Utilities Commission of Ohio in docket 24-508-EL-ATA a proposal 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 megawatts and cryptocurrency mining operations/mobile data centers with loads greater than 1 MW to agree to meet certain requirements before facilities are constructed to serve them.

“Demand for computing power from data centers, which require enormous amounts of electricity, is being fueled by artificial intelligence and other new technologies. AEP Ohio is seeing unprecedented demand from data center customers, especially in the Central Ohio area. 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. This will help us keep Ohio open for business for all industries, while making sure customers aren’t paying for unused infrastructure,” he said.

Data center development has rapidly expanded in AEP Ohio’s service territory, especially in the Central Ohio region, it noted.

Electricity demand in Central Ohio, driven largely by data centers, is already expected to more than double by 2030 making demand in the region roughly equal to that of Manhattan.

Adding additional large users will require investment in new extra-high voltage transmission lines to bring more power into the region. These lines can take 7-10 years to plan and construct, the utility said.

The new rate structure provides AEP Ohio and its customers "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."

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