Will Ohio residents foot bill for data center energy costs?
In recent years, Ohio lawmakers have repeatedly been blinded by the gilded promises of data centers. From 2012-2021, the Buckeye State saw a 146% expansion of local data centers — but the energy grid has failed to match this rapid growth. As a result, Ohioans now face a potential electric capacity issue. With state legislators continuing to approve new data centers built by Big Tech companies like Amazon, but failing to address the strain on the energy grid, it must be asked: Will Ohio residents foot the bill for higher energy costs driven by more data centers?
Ohio’s largest energy provider, American Electric Power, recently issued warnings that it is anticipating unprecedented increases in demand for electricity due to the state’s data center boom — with total demand expected to double between 2018 and 2028. With data centers demanding 100 times more energy than typical industrial customers and an electric grid straining to keep up, Big Tech companies are realizing something needs to give. Amazon, one of the biggest investors in Ohio data centers, took matters into its own hands by asking the state’s public utility commission to give it discounts on transmission infrastructure costs.
But just how much of a discount did Amazon receive? Exact numbers were redacted from public documents, and neither the company nor the state have disclosed the deal’s details. However, Buckeye Power, another energy provider in the state, has reportedly said that Amazon’s discount could be worth a staggering $135 million a year — a cost break for one of the world’s wealthiest companies that could ultimately be passed onto AEP customers.
This comes at a time when Ohioans are already seeing higher electric bills. In March, AEP was granted permission from the state to increase the standard transmission charges billed to ratepayers — raising the average customer’s bill by $10 a month. With the massive overhaul needed to improve the electric grid, and Amazon skirting the responsibility to pay for the improvements, it is reasonable to assume that ratepayers are likely to see even more significant future increases in their electric bills.
Data centers are necessary to power a modern world, but if taxpayers are expected to foot the bill for their energy use, then at the least these deals need to be made transparent.
Orchestrating these secret backroom deals are Amazon’s army of lobbyists in Columbus. In just five months of 2024, the tech giant has lobbied on 16 bills in Ohio, including legislation regarding data storage and notifications issued by state agencies (HB 76) and a measure to update state agency data storage laws (SB 18).
Ohio’s energy grid is already stretched thin, and the seemingly never-ending stream of new data centers threaten the state’s infrastructure even more. With utility companies calling for an electric grid expansion, it should be up to Amazon and the other wealthy companies driving this increase to foot the bill. But when Ohio lawmakers are schmoozing with Amazon lobbyists and agreeing to backroom deals, taxpayers are the ones left footing the bill for wealthy Big Tech companies.