Ohio Grid Build-Out: Who Pays for Transmission and Wires

Ohio market insight · Rates & regulation

Updated September 27, 2026Ohio Commercial Energy editorial teamHow we review content Book a free 15-min bill review

The short answer

Ohio's wires are being rebuilt and expanded on two tracks with two regulators. Transmission — the high-voltage network — is planned by PJM and the utilities, priced under FERC formula rates, and billed to Ohio businesses through nonbypassable utility riders that update at least annually. Distribution — local lines, substations and meters — is priced by the PUCO in rate cases, which House Bill 15 now puts on a three-year cycle. Neither changes when you switch suppliers. What you can influence is how much of each charge your account is assigned, mainly through your transmission tag, your rate schedule and your service voltage.

For reliability concepts such as reserve margins, see grid reliability explained; for the capacity shortfall that drives generation costs, see PJM's capacity shortfall; for AEP Ohio's transmission rider specifically, see the AEP transmission rider; for a statewide rate-case tracker, see PUCO rate case update; and for smart meters and interval data, see grid modernization and your business.

How much is being built

Regional projects. In February 2026 PJM's board approved $11.8 billion of transmission projects in its 2025 regional plan, driven largely by data-center load. They include a roughly $1.1 billion, 300-mile set of 765-kV lines in central Ohio awarded to a joint venture of Transource Energy (AEP and Evergy) and FirstEnergy Transmission.
Local "supplemental" projects. Utilities also build transmission projects they plan themselves, outside PJM's competitive regional process. The Ohio Consumers' Counsel has said Ohio utilities passed along about $16 billion in new transmission expenses from 2017 to 2025, with more than $10 billion going through this supplemental process, and it has asked FERC for tighter oversight.
The trend. PJM-wide transmission costs rose 23% from 2022 to 2024 and made up about 32% of total wholesale costs in 2024, according to Utility Dive's reporting of market data.

Who pays, and how it reaches your bill

Cost	Who approves it	How it's allocated	Where it shows up	Shoppable?
Regional (baseline) transmission	PJM plans; FERC sets rates	Multi-zone projects shared across PJM; others to the local zone	Utility transmission rider	No
Local (supplemental) transmission	Utility plans; FERC formula rates	The utility's own zone	Utility transmission rider	No
Distribution poles, lines, substations, meters	PUCO rate case	Rate classes, then kWh, kW or fixed charges	Distribution charges and riders	No
Generation and capacity	Market	Your usage and capacity tag	Supplier or default generation price	Yes

Each Ohio utility bills transmission through its own rider — AEP Ohio's Basic Transmission Cost Rider, FirstEnergy's Non-Market-Based Services Rider for Ohio Edison, the Illuminating Company and Toledo Edison, and AES Ohio's nonbypassable Transmission Cost Recovery Rider, for example. These update on their own schedules: in the October 2025 updates, AEP's rate for some secondary-voltage customers rose while some FirstEnergy classes saw decreases, which is why the same regional trend lands differently by utility and voltage.

The data-center question

Most new transmission in central Ohio is being built for large new loads. How much of it those loads pay is the core fight:

AEP Ohio's data center tariff (effective July 23, 2025) requires new data-center loads over 25 MW to pay minimum demand charges of up to 85% of their contracted capacity for up to 12 years, with an exit fee equal to three years of minimum charges. It's designed to keep other customers from being stranded with infrastructure costs if a project leaves. The Ohio Manufacturers' Association appealed the order to the Ohio Supreme Court. See the data center tariff explained.
Regional projects that span zones are shared across PJM's footprint under FERC-approved formulas, regardless of which state's load caused them.
Capacity-side costs, such as PJM's fall 2026 backstop procurement, are being left largely to the states to assign.

Distribution: rate cases on a three-year clock

HB 15, effective August 14, 2025, repealed electric security plans (existing ones run until replaced; AEP Ohio's runs through May 2028) and requires each utility to file a rate case by the end of 2029 and every three years after, with a 360-day decision deadline. Recent outcomes:

Utility	Status
AEP Ohio	April 1, 2026 order: base distribution +$11M (vs $97M requested), about $105M tax refund over 18 months, net annual revenue decrease of about $58.7M; new three-part bill format from fall 2026
Ohio Edison, Illuminating Co., Toledo Edison	November 2025 order cut a ~$190M request to ~$34M; after rehearing, a net ~$39.4M annual reduction from March 1, 2026 (CEI up, Ohio Edison and Toledo Edison down); three-year plan for 2027–2029 filed May 2026
Duke Energy Ohio	Filed March 2026 (Case 26-0132-EL-AIR) seeking about 3% for non-residential customers, effective around May 2027
AES Ohio	November 2025 settlement, about +$168M/year base distribution; three-year plan filed July 21, 2026 (about 1% a year)

The practical change for budgeting: distribution increases will arrive in larger, scheduled steps tied to rate cases, rather than through a steady stream of new plan-specific riders. For the full HB 15 picture, see the HB 15 business guide.

What a business can do

Know how your transmission charge is billed. Most business schedules pay transmission riders per kWh or per kW of their own monthly billing demand. Behind that, PJM assigns each zone's transmission cost using customers' network service peak load (NSPL) tags — AEP Ohio sets NSPL from the zone's single highest hour of the year, FirstEnergy from the five highest zone hours in the zone's peak season. Low load on the hottest weekday afternoons helps this tag as well as your capacity tag. See capacity tags explained.
Check your rate schedule and voltage. Transmission and distribution charges differ by schedule and by service voltage. Large sites should confirm they're on the right schedule after any load change.
Ask about pilots and new rate designs. AEP Ohio's transmission rider includes a pilot that bills participants on their own demand at the zone's annual peak hour (1CP) instead of their monthly peak; it reopened to additional participants in December 2025. For a site that can stay low on that one hour, the difference can be significant. HB 15 also allows rate structures for large (mercantile) customers that better match how they cause transmission costs. Your utility account manager can tell you what's available.
Budget wires and supply separately. Supply contracts don't cover transmission or distribution changes. Put rider updates and rate-case dates on your budget calendar.
Weigh in. Rate cases take public comments, and business groups and the Consumers' Counsel intervene. Large users often participate through trade associations.
Consider on-site generation where it fits. HB 15 lets mercantile customers (over 700,000 kWh a year) use their own or third-party generation behind the meter. It can reduce kWh-based charges; demand-based charges fall only if the generation reliably cuts your peaks.

FAQ

Why did my delivery charges go up if my supplier price is fixed?

Supplier contracts cover generation. Transmission and distribution are billed by the utility through riders and base rates that change on their own schedules.

Who decides how much transmission costs?

FERC regulates transmission rates, PJM plans regional projects, and utilities plan local projects. The PUCO approves how the utility passes those costs to Ohio customers.

How often will Ohio utilities file rate cases now?

Under HB 15, each utility must file by the end of 2029 and every three years after, and the PUCO must decide within 360 days of a complete filing.

Are data centers paying for the new lines?

Partly. AEP Ohio's data center tariff requires minimum payments from new large data centers, but regional projects are shared across PJM and cost allocation remains contested.