Data Center Controversies Continue in Ohio

Ohio is grappling with the rapid expansion of data centers, currently ranking among the top five states with approximately 200 facilities. This growth has sparked a contentious debate, particularly within agricultural and rural communities, where concerns about farmland loss, intensive water and electricity use, and sales tax exemptions are frequently voiced. One significant development is the "Ohio Residents for Responsible Development" group's initiative to propose a constitutional amendment for the November ballot. This amendment would prohibit the construction of data centers with a peak monthly load exceeding 25 megawatts. The Ohio Ballot Board and the Ohio Secretary of State have authorized the group to begin collecting the necessary 413,000 signatures from at least half of Ohio's counties by July 1. Concurrently, the Ohio Supreme Court is reviewing an appeal against a statewide data center tariff approved by the Public Utilities Commission of Ohio (PUCO) last July. Backed by AEP, the Ohio Consumers Counsel, Ohio Energy Group, Ohio Partners for Affordable Energy, and Walmart, the tariff mandates that data centers drawing 25 MW or more pay a minimum of 85% of their committed load over a 12-year period, aiming to prevent residential customers from subsidizing development costs. The tariff also requires AEP to lift its moratorium on new data center connections. The Ohio Manufacturers’ Association Energy Group (OMAEG) appealed this decision, arguing it is discriminatory. All parties have submitted their briefs, awaiting oral arguments. The Ohio General Assembly is also actively engaged, with several bills under consideration. House Bill 646, passed by the Ohio House and now before the Ohio Senate, proposes establishing a Data Center Study Commission to examine development issues and recommend legislative solutions. Other bills include H.B. 706, which seeks to prevent data center infrastructure costs from shifting to existing ratepayers; H.B. 695, prohibiting non-disclosure agreements for local officials; S.B. 374, aiming to limit sales tax exemptions; H.B. 784, requiring water consumption reports from data centers; and S.B. 381, mandating PUCO approval for certain data center interconnections. These legislative efforts collectively highlight the state's multifaceted approach to regulating data center growth and mitigating its perceived negative impacts.