Two Ohio lawmakers say they want to bring how one electric utility is handling rising data center demand to elsewhere in the state.
In July, American Electric Power (AEP) got the green light from the state regulatory body the Public Utilities Commission of Ohio (PUCO) to move forward with its data center tariff, requiring any new data center to commit to covering the cost of at least 85% of the energy they say they will use, even if they use less.
AEP Ohio said in February the newly established financial obligations are working by weeding out 鈥渦ncommitted data center load,鈥� according to PUCO documents. But the Ohio Manufacturers鈥� Association has criticized AEP over its load forecasts, saying it reflects 鈥渢ariff mechanics, not new customer demand.鈥�
Rep. David Thomas (R-Jefferson) and Rep. Tristan Rader (D-Lakewood) introduced legislation two weeks ago mirroring what AEP has done.
鈥淲e have a tool that is actually working out,鈥� Rader said in an interview. 鈥淲e have a very, very great model we can use here in central Ohio. Other states are doing similar things, so there鈥檚 no real reason to wait.鈥�
Under , before starting any construction, large-scale data center projects would enter contracts with electric utilities detailing their minimum billing demand, long-term service agreements, exit fees or liquidated damages for canceled projects and potential collateral or guarantees.
HB 706 also bans utilities from recovering costs data centers have caused by shifting them onto other customers. Thomas said more than one community in his district has enacted a moratorium on data centers, a trend gaining steam locally and nationally.
鈥淚t鈥檚 our responsibility to take away the reasons that locals will be fearful,鈥� Thomas said in an interview. 鈥淲hether we allow them to ban them or not, I think that鈥檚 bad policy, but if there鈥檚 fear, then we have to address that.鈥�
During the 2026-2027 budget, lawmakers tried ending the 100% sales tax exemption on the materials to build data centers, but Gov. Mike DeWine overruled them. The Chamber of Commerce has also defended the exemption, its elimination would result in 35% less in investment and $500 million less in revenues by 2030.