Ohio lawmakers are looking to implement cost protections for consumers, as the development of data centers continues to rise.

A new proposal in the state house would build off of the Public Utilities Commission of Ohio (PUCO)-approved data center tariff contracts that American Electric Power (AEP) Ohio has already placed on its own high-power customers. 

Tariff contracts for data centers have become a growing way of managing consumer costs when it comes to the centers' high energy consumption and offer a utility providers a way to sustainably expand energy commitments to data centers. AEP told 21 News on Friday that the contracts will protect the company's other customers "from shouldering the costs of an overbuilt system built on inaccurate estimates."

In a Tuesday release, State Representatives David Thomas (R-Jefferson) and Tristan Rader (D-Lakewood) announced a bipartisan bill that would expand these contracts statewide, encompassing all Ohioans regardless of their electric provider. The lawmakers say that the proposed legislation would provide "guardrails to support responsible development, while shielding other customers from rate impacts."

If passed, the bill would require all Ohio data centers to enter into "long-term service agreements" with electricity providers before the provider builds any grid infrastructure dedicated to the centers' high energy consumption. Data centers would have to commit to a minimum 12 year contract. They would also have "financial assurance requirements" to complete before any dedicated energy-production facilities are built for them.

Through the bill, PUCO would also be a key player in the development of data centers in the state. The utilities commission would establish the standards for "interconnection queue practices, load study deposits, and milestone requirements."

Additionally, the proposed bill would prohibit utility companies from recovering any costs associated with data centers from other customers and return "exit payments or unused-capacity charges to customers."

Thomas and Radar stated that the legislation has received bipartisan support so far, and is set to be introduced in the state house in the "coming days."

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