An Ohio power company has proposed that data center operators like Google, Amazon, Microsoft, and Meta pay a significant chunk of the expected load, due to their huge energy consumption.
Tech companies had originally agreed to pay 60 percent of the projected amount. However, American Electric Power Ohio is now calling for the firms to put up 90 percent of the costs as part of a 10-year new fee structure, even if they don’t end up using that much. Google, Amazon, Microsoft and Meta are fighting the plan, deeming the move “unfair” and “discriminatory” in documents filed with Ohio’s Public Utility Commission last month.
What are the data center tariff proposals in Ohio?
AEP Ohio has proposed creating two new tariffs designed to help the company accommodate an unprecedented amount of anticipated load growth from an influx of new data centers within its service territory. This includes a “Data Center Power” tariff for new data center customers with a monthly demand of 25 MW or more, and a “Mobile Data Center” tariff for new mobile data center customers, such as cryptocurrency miners, with a monthly demand more than 1 MW.
Important for how utility companies are looking to handle data center power consumption growth…this decision will be pivotal >
"AEP Ohio opened a proceeding (Docket 24-05058) with the Public Utilities Commission of Ohio, proposing to create two new tariffs designed to help… pic.twitter.com/TgAk784VPS
— Tracy Shuchart (𝒞𝒽𝒾 ) (@chigrl) July 14, 2024
The changes are to protect existing customers from “bearing the burden of new transmission if new large load customers do not ultimately connect to the system after committing.”
Cited by Factset, the Data Center Coalition, the national membership association for the data center industry, says the new tariffs “explicitly prohibits public utilities from granting undue preference or imposing undue disadvantage on customers.”
They add: “The proposal is a one-sided commitment that places all obligations on data center customers and is notably deficient in actual analysis, economic or otherwise, that demonstrates how AEP Ohio’s solution would solve the problem it articulates.”
Meanwhile, Google stated in its filed comments that “changes to rate classifications and customer charges should be considered in a base rate case where cost of service, rate of return, and rate design issues can be comprehensively addressed, rather than through a tariff filing.”
Meta claims the “tariffs depart from traditional rate making principles by classifying customers by business type rather than by their load characteristics.”
In March, ReadWrite reported that Amazon is gearing up to invest nearly $150 billion over the next 15 years in data centers. An Amazon spokesperson confirmed to us at the time that the figures were based on its recent infrastructure announcements.
ReadWrite has reached out to Amazon, Microsoft, Google, Meta, and AEP for comment.
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