Ohio lawmakers go deep on data centers

Ohio lawmakers have commenced their first legislative committee meeting to delve into the burgeoning issues surrounding the state's data center industry, a sector that currently includes 204 facilities statewide. The bipartisan panel, tasked with an ambitious timeline to draft potential legislation by early June, initiated discussions on the industry's impact on electric rates, the contentious sales tax exemption, and water usage. The committee's proceedings follow a recent announcement by Governor Mike DeWine, who abruptly declared a "pause" on Ohio's sales tax exemption for data centers, a move that came after the initial testimonies.

During the hearing, testimony from industry lobbyist Dan Diorio of the Data Center Coalition clashed with statements from state officials and ratepayer advocates regarding electricity costs. Diorio contended that data centers actually reduce electric expenses, while Maureen Willis, the state's residential ratepayer advocate at the Ohio Consumers’ Counsel, argued that data center developers should bear the extraordinary costs associated with their increased load on the electric grid. Republicans on the committee generally expressed support for the industry, citing constituents' "negative misunderstandings," while Democrats raised concerns about the necessity of tax breaks and project secrecy.

The sales tax exemption, which cost Ohio approximately $1.6 billion in lost revenue last year—significantly higher than official estimates—was a central point of debate. House Republican Speaker Matt Huffman has previously expressed a desire to override Governor DeWine's past veto of a measure to eliminate the exemption. The committee's work is anticipated to address these fiscal and environmental concerns, with future hearings slated to include testimony from local governments and industry opponents, underscoring the political intensity of data center development in Ohio.