PUCO takes steps to limit data center power cost increase

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(The Center Square) – Ohio power regulators are taking steps they say are designed to protect large electric customers from paying higher rates because of data centers.

Under a new order by the Public Utilities Commission of Ohio, data-enter customers will have to give AEP Ohio, a large power company, notice when they plan to ramp up electricity usage so other large customers don’t see power bills increase because of the increased demand from data centers.

 “Upon receiving notice, AEP Ohio will procure energy to serve the customer through separate stand-alone auctions or spot-market purchases, with the entirety of the cost assigned to the data center customer,” the commission said in a statement. “This ensures that the costs to serve the data center customer do not impact other customers also on AEP Ohio’s default rate.”

This spring, the state utility board approved a new rate structure for AEP Ohio.

“New data centers must pay a minimum monthly customer charge,” the board said. “This helps ensure new data centers pay for the costs they create on the grid.”

The commission defines a data center as “a building that holds many computers which store and process information. Much of ‘the cloud’ lives in data centers.”

Ohio has 240 data centers in 19 markets, accessing to Data Map, which tracks the industry

Critics say data centers have the potential to drive up electricity costs and also strain Ohio’s water supply. However, one of Ohio’ attractions for data centers is that the state has a cooler climate, requiring less water for cooling the centers.

“We continue to implement safeguards to ensure that other customers are not impacted by costs to serve large loads like data centers,” PUCO Chair Jenifer French said. “Ohio is fully committed to protecting customers from added costs related to data center buildout. Today’s action builds upon the PUCO’s efforts to create separate rate classes for data center customers, and the commitments under the Ratepayer Protection Pledge.”