Data center demand may already be adding $10 to $20 a month to some Ohio household electric bills − and neither utilities nor regulators can tell customers exactly how much, or why.
The Enquirer recently published a five-part investigation into the effect Ohio’s rapidly expanding data-center industry is having on the electric bills paid by ordinary citizens. Most customers could not explain their bill if they tried. Charges for generating electricity, transmitting it across the regional grid, and distributing it to individual customers are combined into a single monthly statement that provides little help in determining what’s driving an increase. And it certainly doesn’t say how much of it is going to support data centers.
The reason begins with
the way Ohio obtains electricity.
Ohio is part of a 13-state electricity system operated by PJM Interconnection. PJM exists because electricity does not remain within state or utility boundaries, and the amount being generated must continuously match the amount being consumed. It coordinates the regional grid and operates the wholesale market from which electricity suppliers obtain power and reserve enough generating capacity to meet future demand.
Most data centers enter that system as enormous new consumers without bringing an equivalent new source of electricity. When AEP Ohio or Duke Energy Ohio adds a data center’s projected demand to the regional system, suppliers must obtain more electricity and reserve more generating capacity through PJM. When demand rises faster than supply, wholesale prices rise throughout the region − not merely in the community receiving the data center.
Regional utilities may also need to build billions of dollars in new transmission lines, substations and other infrastructure to feed the data centers’ massive electricity needs. Unless those expenses are assigned directly to the data centers, families and ordinary businesses can end up financing the power requirements of some of the world’s richest technology companies.
Now Ohio has been presented with a different model.
OpenAI has committed to becoming the principal customer of what could be the world’s largest AI data-center campus, at the former Portsmouth uranium-enrichment site in Pike County.
The PORTS-Pike campus is expected to provide roughly eight gigawatts of computing power. To support it, the project plans to build approximately 10 gigawatts of new generation − enough, if used by homes instead, to serve about 8 million households, double the number of households in Ohio.
Instead of arriving with unprecedented new demand and forcing AEP to chase additional electricity through an already strained regional market, PORTS-Pike will bring enough new generation to supply its own needs. The project will still connect to the regional grid for reliability and to make excess power available, but it’s designed to add supply rather than compete with existing customers for a limited supply.
It will also pay the full $4.2 billion cost of the new high-voltage transmission lines and four substations needed to connect the campus to the regional system. Those figures, like the generation numbers above, come from the Department of Energy and the companies involved, not yet from public agreements.
That’s the breakthrough.
PORTS-Pike isn’t merely promising to reimburse customers for costs it creates. It’s designed to prevent those costs from reaching other customers in the first place.
The arrangement shouldn’t be accepted entirely on faith. The controlling agreements haven’t been made public, and they need to confirm who pays for cost overruns, how long the commitments remain enforceable, and what happens if the new generation is delayed, underperforms, or the project itself is downsized.
The dirt, if there is any, will be in those details.
Nor does the arrangement answer every legitimate question about data centers. Water use, emissions, noise, land consumption, tax abatements and permanent job counts still require independent scrutiny.
But based on the public record so far, PORTS-Pike establishes the right electricity model.
That model should now be applied to the proposed hyperscale project in Butler County’s city of Trenton, which has already approved one enormous data-center project and is pursuing annexation of roughly 600 additional acres for a proposed Amazon Web Services campus.
A data center in Trenton would add its demand to the same regional power market serving Cincinnati and much of Ohio. Duke customers don’t become immune simply because the facility sits outside Duke’s service territory.
Before another hyperscale project is approved, its developer should be required to create enough new electricity to meet its own needs and pay the full cost of the transmission lines, substations and other infrastructure required to serve it.
Ohio shouldn’t depend on voluntary negotiations to produce that result one project at a time.
The General Assembly and the Public Utilities Commission of Ohio should make the PORTS-Pike principle mandatory for every future hyperscale data center, regardless of which utility serves it.
If the largest proposed data center in the world can create the power it needs and pay the full cost of delivering it, why should any smaller project be permitted to do less?
The rule should be simple: Bring your own power. Pay for your own connection. Do not raise everyone else’s electric bill.
Dennis Doyle lives in Anderson Township and is a member of the Enquirer Board of Contributors.
This article originally appeared on Cincinnati Enquirer: Ohio should make data centers bring their own power | Opinion
