Ohio Regulator Approves AEP Proposal for Data Center Energy Requirements

Ohio regulator approves AEP proposal that data centers pay for energy requests regardless of need, according to Bloomberg. The proposal requires data centers to pay for some of their energy requests even if the electricity is not needed, as reported by peterschreiber.media/iStock via Getty Images.

In a significant move to manage the growing energy demands of data centers, Ohio regulators have approved a proposal by American Electric Power Co. (AEP) that requires data centers to pay for a portion of their energy requests regardless of whether the electricity is actually used. This decision comes amidst the ongoing debate surrounding how to fund the infrastructure needed to support the booming AI industry.

The settlement, voted through on Wednesday, mandates that facilities must pay for at least 85% of the energy they request each month, even if they use less. This move is intended to help fund grid upgrades and address the escalating costs associated with the increasing electricity consumption by data centers. According to Bloomberg, this change is part of a broader effort to ensure that the power grid can handle the demands of the AI boom [1].

The proposal from AEP, one of the largest power companies in the U.S., is a departure from the terms previously proposed by big tech firms, including Amazon.com Inc., which had suggested different requirements. The new rule aims to stabilize costs and ensure that the infrastructure can keep up with the growing demand for power from data centers.

The approval of this proposal highlights the evolving landscape of energy consumption and the need for innovative solutions to manage it. As data centers continue to grow in size and number, the financial burden on both providers and consumers will be significant. This regulation is a step towards ensuring that the costs are shared equitably and that the grid remains resilient.

References:
[1] https://www.bloomberg.com/news/articles/2025-07-09/ohio-rules-that-data-centers-will-pay-for-minimum-energy-needs