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AEP Ohio Data Center Tariff: What It Means for Others

Ohio market insight · Data centers

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The short answer

Since July 23, 2025, new data centers of 25 MW or more in AEP Ohio's territory take service under a separate tariff that bills them for at least 85% of the capacity they contract for, for up to 12 years, with collateral and an exit fee. The design moves the risk of unused grid investment onto the data center instead of other customers. It does not lower PJM capacity prices or anyone's supply rate directly, and an appeal by the Ohio Manufacturers' Association Energy Group is still pending at the Ohio Supreme Court.

What the tariff requires

PUCO approved the tariff on July 9, 2025 (Case 24-508-EL-ATA), and it took effect July 23, 2025. The approval also ended the moratorium AEP Ohio had placed on new data center service requests in central Ohio.

Term What AEP Ohio's tariff says
Who it covers New data centers, or expansions, of 25,000 kW (25 MW) or more
Minimum bill Demand billed at no less than 85% of contracted capacity (a modified formula applies to 25–75 MW sites) or of the highest demand in the prior 11 months
Load ramp Up to four years, stepping through 50%, 65%, 80% and 90% of contract capacity
Contract length Ramp period (up to 4 years) plus 8 years, so up to 12 years
Leaving early Exit fee equal to 36 months of minimum charges
Collateral 50% of total minimum charges for the term, unless the customer has an A-/A3 credit rating and cash well above the collateral amount
Load study fees $10,000 (25–50 MW), $50,000 (50–100 MW), $100,000 (100 MW and up)

AEP Ohio accepts new applications in tranches; its tariff page lists the next deadline as September 30, 2026, with studies starting in October 2026.

Why it was built: a queue larger than the whole utility

Before the tariff, AEP Ohio reported roughly 30,000 MW of data center requests. Once developers had to put money behind them, about 13,023 MW moved into engineering studies and 5,642 MW signed binding agreements, according to AEP Ohio's February 2026 update to PUCO. Add 12,219 MW signed before the tariff and the contracted total is about 17,861 MW, scheduled to come online through 2035.

For scale, AEP Ohio's peak demand across all customers runs about 8,000–10,500 MW. Even the filtered data center pipeline is larger than today's entire system peak, which is why the terms matter to everyone else on the system.

What it changes for other commercial customers

The tariff affects ordinary accounts indirectly, through three channels.

  • Stranded-cost protection on delivery. Substations and lines built for a data center are recovered through rates that all customers pay. If a data center ramps slower than promised or leaves, the minimum bill, exit fee and collateral are meant to cover that investment rather than spreading it across other classes.
  • Forecast discipline. Speculative requests inflate the load forecasts that PJM uses to size its capacity auctions. PJM's January 2026 forecast cut the AEP zone's 2031 summer peak by about 10.4% (3.7 GW) versus the prior year's forecast, citing stricter vetting of large loads. The OMA group disputes how much of that reflects the tariff, arguing that AEP's own load forecasts to PJM did not fall in step with the contract totals.
  • Transmission allocation. AEP Ohio recovers transmission costs through its Basic Transmission Cost Rider, spread across customer classes. At the April 2026 update, several non-residential components fell while residential rose; an Ohio energy consultant's summary attributed part of the non-residential change to data center load growth. How costs are split between classes matters as much as the total.

What it does not change: your supply price. PJM capacity prices are set region-wide and have cleared at or near the cap for 2026/27 through 2028/29 ($329.17, $333.44 and $325.00 per MW-day). Your SSO or supplier contract, and the capacity tag that drives your share of those costs, work the same as before.

The Ohio Supreme Court appeal

The Ohio Manufacturers' Association Energy Group appealed PUCO's decision in November 2025 (Supreme Court Case No. 2025-1458). Its central argument is that the tariff singles out one industry instead of applying size-based rules to any large load; at PUCO it had preferred an approach aimed at loads over 50 MW in transmission-constrained areas. Briefing closed on March 24, 2026. We found no decision as of late September 2026; check the court's docket for the current status.

A ruling against the tariff would most likely send the case back to PUCO. One possible outcome is a large-load tariff defined by size rather than industry. That would matter to manufacturers planning major expansions, because terms such as minimum demand and collateral could then apply to them as well.

What to do on your next procurement cycle

  • Confirm your utility. The tariff applies only in AEP Ohio's territory. Duke Energy Ohio, AES Ohio and the three FirstEnergy utilities handle large loads in their own cases, and municipal-system customers cannot shop at all.
  • Keep delivery changes out of supply comparisons. Rider and rate-case changes hit every customer on the utility, whoever the supplier is.
  • Price capacity by delivery year. Capacity prices are known through May 2029. The 2029/30 auction closes in December 2026 under a price collar of $175 to about $325 per MW-day.
  • Manage your capacity tag. At about $120 per kW-year, each kilowatt you shed during summer peak hours is worth more than it was two years ago.
  • Plan large expansions early. If you are adding tens of megawatts, ask AEP Ohio early about load-study timing and any minimum-demand terms.

For how data center load moves prices region-wide, see data center demand and Ohio power prices. For practical steps to limit the impact on your costs, see how Ohio businesses can respond to data center growth. For the New Albany and Licking County projects themselves, see Intel, AWS and central Ohio data centers. Utility-level context is on the AEP Ohio service area page, and tag tactics are in the PLC guide.

FAQ

Does the data center tariff apply to my office, plant or warehouse?

No. It covers only new or expanding data centers of 25 MW or more in AEP Ohio's territory. Other commercial and industrial accounts stay on their existing rate schedules.

Will the tariff lower my electric bill?

Not directly. It aims to keep other customers from paying for grid investment that data centers end up not using. Your supply price is still driven by PJM capacity and energy prices and by your own load profile.

What happens if the Ohio Supreme Court overturns it?

The case would most likely return to PUCO for new terms. A size-based large-load tariff is one plausible replacement, and it could apply to large manufacturers as well as data centers.

Does it affect customers of Duke Energy Ohio, AES Ohio or FirstEnergy?

The tariff itself applies only to AEP Ohio. Customers in every Ohio utility zone still share PJM's region-wide capacity prices, which reflect data center growth across the whole footprint.

Sources

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