On May 13, 2024, AEP Ohio, a subsidiary of American Electric Power (Nasdaq: AEP), submitted a proposal to the Public Utilities Commission of Ohio under docket 24-508-EL-ATA. The plan aims to establish a new rate category for data center customers and cryptocurrency mining/mobile data center operations. According to the proposed rate structure, new data centers with loads exceeding 25 megawatts (MW) and cryptocurrency mining operations/mobile data centers with loads surpassing 1 MW would need to agree to certain conditions before facilities are built to accommodate them.
Marc Reitter, AEP Ohio president and chief operating officer, stated that the surge in demand for computing power from data centers, which require substantial amounts of electricity, is driven by artificial intelligence and other emerging technologies. He noted that while there are no concerns about serving current or new residential and existing commercial or industrial customers, it is crucial to ensure that appropriate long-term investments are made in the electric grid.
Under the proposal, data centers would be obligated to make a ten-year commitment to pay for at least 90% of their projected monthly energy needs – even if they consume less.
The development of data centers has seen rapid growth in AEP Ohio’s service territory, particularly in Central Ohio. Electricity demand in this region is expected to more than double by 2030 due to these developments. This surge will necessitate investment in new extra-high voltage transmission lines to bring more power into the region – a process that can take between seven and ten years.
Reitter further added that AEP Ohio's extensive network of transmission lines has helped attract thousands of jobs and billions of dollars in investment to Ohio. The proposed rate structure provides AEP Ohio and its customers with the certainty needed for long-term planning while giving data center and cryptocurrency mining customers clarity on their obligations.
AEP Ohio provides electricity services to approximately 1.5 million customers and is a unit of American Electric Power. The parent company, based in Columbus, Ohio, operates and maintains more than 40,000 miles of transmission lines and over 225,000 miles of distribution lines to deliver power to 5.6 million customers across 11 states.