Ohio power bills rise on questionable data

Ohio's largest regulated electric utility, American Electric Power's Ohio Power Co., anticipates electricity demand will nearly triple over the next decade, largely due to expected data center projects. This forecast is driving plans for billions in grid investments that customers will fund, even if many of the nearly 150 planned facilities never materialize.

Critics question the validity of these forecasts and the wisdom of using them to justify costly investments. "We have watched projected demand become the justification for enormous spending, record capacity costs, and increasingly urgent claims about grid reliability," said Brad Belden, board chair of the Ohio Manufacturers’ Association Energy Group, at its annual conference on Aug. 27. He argued reliability cannot be a magic word that ends every conversation about cost.

Questionable Forecasts Drive Investment

Utilities base grid investments on demand projections. In Ohio, those forecasts are now exceptionally high. Researcher Jonathan Koomey of Koomey Analytics, who focuses on data centers and computing, said utility forecasts generally presume trends will continue along recent paths. But he notes "there is deep uncertainty." Computing efficiency improves over time, potentially making future data centers less energy-intensive. Demand for AI services may not support developers' ambitious plans. Developers also often shop projects in multiple locations for the best deal.

As of February, AEP Ohio's load forecast reflected signed contracts for 17.8 gigawatts of data-center demand planned through 2035, down from an earlier 2025 estimate. Even at this lower level, critics question the figure. A March 2026 regulatory staff filing at the Public Utilities Commission of Ohio noted some double-counting in AEP Ohio's expected data center growth.

Two Paths to Higher Bills

Data center forecasts can drive up electricity costs in two key ways: by increasing capacity prices and by prompting utilities to build new power lines. Capacity prices pay for power plant operators to be available to meet demand spikes. In the PJM Interconnection territory, which includes Ohio, these charges have surged more than tenfold since May 2025. PJM lacks the total generation necessary to meet the expected deluge of data center demand.

Meeting that need, which analysts like Koomey say may be inflated, will likely lead to a jump in fossil-fueled electricity. Energy analyst Dennis Wamsted of the Institute for Energy Economics and Financial Analysis reported that between 2025 and 2027, added generation from fossil-fueled plants in the region will be 2.5 times the extra electricity supplied by solar and wind.

The Transmission Cost Challenge

Projections also drive plans for expanded transmission infrastructure. "If these data centers don’t show up …, you’re going to pay the costs," said John Seryak, CEO of energy consulting firm RunnerStone. In Ohio, manufacturing and consumer advocates worry that plans to build transmission are not met with enough scrutiny.

While large-scale projects are overseen by the Federal Energy Regulatory Commission, lower-level "supplemental" transmission is up to the states, said Asim Haque, PJM’s executive vice president for government and member services. These projects can add up to billions of dollars. Maureen Willis, agency director for the Office of the Ohio Consumers’ Counsel, said at the OMA conference that no one in Ohio is independently examining their prudence or cost-effectiveness.

The Ohio Consumers’ Counsel filed a complaint with FERC in 2023, asking it to require scrutiny of costs for supplemental transmission, but the agency has not yet acted. Last month, the OCC asked the commission to speed up its review. "OCC’s consumer-protection complaint has been collecting dust at FERC for nearly three years while billions more in transmission projects continue to be added," Willis said.

Grid Operator and Regulatory Response

So far, regional grid operator PJM has not been persuaded by those challenging the extent of energy growth. "The Ohio Manufacturers’ Association has been saying that, effectively, load growth is not real. I think that is both naive and irresponsible," said PJM's Asim Haque.

In January, PJM released new guidance altering its process for load forecasting and adding steps for states to review adjustments for large loads. Critics say that’s not enough. Analysts have criticized PJM and Ohio for making it difficult to build inexpensive solar, wind, and battery projects in recent years, which could have helped cushion rising costs.

A 2025 Ohio law calls for utilities and state regulators to consider grid-enhancing technologies as a more cost-effective alternative to building traditional transmission. It is unclear how that provision and cost recovery will work together. A new rule limiting the time to question company witnesses about customer charges will make it even harder to challenge costs.

Brad Belden of the Ohio Manufacturers’ Association Energy Group demands more accountability. "Show us the demand. Show us what is being built. Show us who is paying for it." he said.