24-0508-EL-ATA

Key events and submissions in the AEP Ohio data center tariffs proceeding are as follows:

- May 13, 2024: AEP Ohio filed its application to establish new tariffs for data centers and mobile data centers (cryptocurrency miners) 1, 2.
- June 25, 2024: Deadline for initial comments from parties 2.
- July 8, 2024: Deadline for reply comments 2.
- July 11, 2024: The Public Utilities Commission of Ohio (PUCO) issued an entry establishing a procedural schedule, including a deadline for intervenor testimony and the scheduling of an evidentiary hearing 1, 3.
- August 15, 2024: Original deadline for filing intervenor testimony (later moved) 3.
- August 19, 2024: Initial deadline for intervenor testimony (later extended) 3, 3.
- August 29, 2024: Extended deadline for intervenor testimony after a two-week extension was granted by the commission 3, 4.
- October 10, 2024: A group of parties (including Amazon, Google, Meta, Microsoft, and others) filed a joint stipulation and recommendation (the "October 10 stipulation") 1.
- October 11, 2024: Motions and responses regarding hearing continuance and scheduling were filed, with staff requesting a prehearing conference rather than immediate adoption of proposed deadlines 5.
- October 21, 2024: Original scheduled date for the evidentiary hearing; parties requested a seven-day extension to October 28, 2024 5.
- October 18, 2024: Proposed deadline for testimony in support of the stipulation 5.
- October 25, 2024: Proposed deadline for testimony opposing the stipulation 5.
- October 21/22, 2024: All-party settlement meetings and circulation of draft stipulations occurred around these dates 6.
- October 23, 2024: A second stipulation (AEP Ohio stipulation) was filed 7.
- Throughout October 2024 - January 2025: Settlement discussions, hearings, and additional testimony submissions occurred, including supplemental testimony in support or opposition to the stipulations 7, 8.

This timeline reflects the major procedural milestones and key submissions in this PUCO proceeding.

This docket concerns AEP Ohio's proposal to create a new tariff for large data center customers and related procedural and regulatory issues before the Ohio Public Utilities Commission. The primary focus is on:

- AEP Ohio's application for a new tariff to serve large data center loads, including new contract terms, minimum billing demands, and the treatment of data centers versus other large loads 1, 2.
- Regulatory process issues, including the timing and adequacy of required public notice for hearings under Ohio law (R.C. 4909.18), with concerns raised about late or insufficient newspaper publication of hearing notices, potentially impacting due process and stakeholder participation 3, 4.
- The withdrawal "without prejudice" of AEP Ohio's Standard Service Offer (SSO) generation supply proposal, with the right to raise it in a separate docket in the future 5, 2.
- The commission's handling of comments, interventions, and staff participation, including periods where no staff comments were filed and limited commission action during a moratorium on certain tariffs 6, 6, 6, 6.
- Debate over cost allocation, risk of stranded investments, and the impact of large new loads (especially data centers) on rates and transmission planning for Ohio ratepayers 7, 8.

Overall, the docket addresses AEP Ohio’s efforts to adapt its tariffs for rapidly growing data center demand, procedural adherence to public notice and hearing requirements, and broad stakeholder engagement in a highly public and controversial proceeding.

The docket identifies several areas of growth, focusing primarily on:

Data Center Growth:
- There is a significant increase in electricity demand projected from data centers, with AEP Ohio citing up to 30 gigawatts of potential load requests. However, much of this growth is concentrated among a small number of large tech companies, making it highly sensitive to changes in their corporate strategies. The forecasted growth is considered highly uncertain and potentially speculative, particularly since just a few years ago, forecasts for the AEP zone were flat. In Virginia, for example, 62% of forecasted data center demand for 2030 is attributed to just two entities, and five entities account for over 80% 1. Key considerations include the need for more precise load forecasting, objective and nondiscriminatory credit policies, and the risk that utility proposals could hinder data center development due to higher minimum demand charges, exit fees, and stringent contract terms. Load growth assumptions should be independently reviewed and substantiated to avoid overbuilding or misallocating resources 2.

Cryptocurrency Mining Facilities:
- Growth is also noted from data mining (cryptocurrency) facilities, which differ from traditional data centers because their operations can fluctuate based on profitability (e.g., the “quarq spread”). This makes their load demand more variable and unpredictable compared to steady, high-load data centers 1. Key considerations here include the need for utility tariffs and policies that account for the volatile and potentially transient nature of crypto mining loads.

Industrial and Electrification Growth:
- The docket references broader trends in industrial electrification (such as manufacturing reshoring and automobile electrification) as additional sources of load growth. In Texas (ERCOT), significant growth is tied to oil and gas development, hydrogen hubs, and renewable generation coming onto the grid. This mirrors potential developments in Ohio and highlights the multifaceted drivers of increased electricity demand 3.

Key Considerations Across Growth Areas:
- Effective regulatory oversight requires that utilities provide transparent, data-driven load forecasts, ideally reviewed by independent evaluators.
- Tariff and rate changes must be fair, non-discriminatory, and thoroughly vetted in full rate cases to avoid piecemeal ratemaking and ensure just and reasonable rates.
- Policies affecting new large loads (including minimum contract terms, exit fees, and credit requirements) should apply consistently based on load characteristics rather than customer business type, to prevent discrimination and support equitable grid development 4, 2.
- There is concern that narrow or poorly justified policy changes could stifle investment, particularly in the rapidly growing data center sector 2.

In summary, the docket identifies data centers, crypto mining, and broader industrial/electrification as growth areas, with major considerations centering on forecast uncertainty, risk allocation, non-discriminatory treatment, and the need for comprehensive regulatory review.

The docket discusses several financial and timeline risks and concerns related to large loads—especially data centers—in AEP Ohio's service territory:

Financial Risks:
- Stranded transmission investment: If too much transmission is built to serve large loads that later leave or reduce consumption, the resulting stranded costs can lead to higher transmission rates for remaining customers. Actual stranded costs (not just the risk) translate into higher rates, as these costs must be recovered from a smaller customer base 1.
- Tariff discrimination: There is concern that tariffs targeting specific industries (like data centers) rather than being based on load characteristics could obligate those industries to bear a disproportionate share of costs driven by broader customer groups. Non-discriminatory tariffs based on load rather than end-use are recommended to avoid unfair cost allocation 2.
- Financial commitment requirements: Proposals include mandatory long-term contracts (e.g., eight years) with significant exit fees to ensure revenue adequacy for transmission system investments and to mitigate the risk of customers exiting early and leaving unrecovered costs 2.
- Recovery of costs: The ability of AEP to recover investments in generation, transmission, and distribution is influenced by regulatory decisions, rate case outcomes, and whether expected sources of capital materialize. Delays or failures in cost recovery can impact finances 3.

Timeline Risks:
- Timing of commission actions: There were periods where no public action or investigation dockets were opened by the commission after the announcement of certain moratoriums or before the filing of major applications, highlighting potential regulatory delays 4.
- Procedural delays: Regulatory proceedings (such as hearings, settlements, or consolidation of dockets) can extend the timeline for implementing new rates or resolving tariff issues, which may delay cost recovery or create uncertainty for both the utility and customers 5.
- Notice requirements for contract exit: Proposals include a 24-month notice requirement for contract exits to provide predictability and allow time for the utility to adjust its planning and investments 2.

Overall, the central concerns are ensuring that large new loads do not create financial risks for the utility and its other customers due to premature departure (stranded costs), avoiding discriminatory tariffs, and addressing procedural or regulatory delays that could impact timely cost recovery and system planning 2, 1, 2.

Stakeholders in this Ohio Public Utilities Commission docket include:

- AEP Ohio (the utility applicant)
- Data center customers (Amazon, Google, Meta, Microsoft)
- Customer coalitions/trade groups (OMA Energy Group - OMAEG, Data Center Coalition - DCC, Ohio Energy Leadership Council - OELC, Ohio Business Council - OBC, Industrial Energy Users - OEG, Retail Energy Supply Association - RESA, Interstate Gas Supply - IGS, Constellation, One Power)
- Large commercial customers (Walmart)
- Office of the Ohio Consumers’ Counsel (OCC)
- Commission Staff

Positions on Proposals:

10/10 Stipulation (Customer/Intervenor Coalition Proposal):
- Supported by: The majority of intervenors, including DCC, Google, RESA, IGS, One Power, OMAEG, OBC, Constellation, OELC, and others. Staff agrees it was the product of serious bargaining, though ultimately signed onto the 10/23 stipulation.
- Opposed by: AEP Ohio (the utility) and some parties like OEG and Walmart raised concerns about whether the process was sufficiently diverse and whether the stipulation favored data center interests over others. AEP Ohio argues this stipulation is a "faux settlement" that lacks utility consent and does not resolve utility-raised issues 1.

10/23 Stipulation (AEP Ohio/Staff Proposal):
- Supported by: AEP Ohio (the utility), Commission Staff, OEG, and some other signatories.
- Opposed by: Data center customers (none signed it), DCC, OMAEG, OBC, and other coalition/intervenor groups. These parties argue the 10/23 stipulation is discriminatory against data centers and violates cost-causation and non-discrimination principles 2.

Other Insights:
- Walmart is neutral but echoes concerns about the similarity of interests among 10/10 parties and calls for clearer standards on "serious bargaining."
- OCC is active in discovery but is not described as taking a clear for/against position in the provided excerpts.
- The Staff signed the 10/23 stipulation but acknowledged the 10/10 stipulation was the product of serious bargaining among capable parties 1.
- No evidence of side deals among OMAEG and other intervenors beyond the public stipulation 3.

In summary, the utility and staff back the 10/23 stipulation, while a broad coalition of intervenors and all data center customers support the 10/10 stipulation. Walmart is noncommittal but cautious. OEG supports the utility's position, and OCC is participating in discovery.