Ohio regulators make tech companies pay more for energy-hungry data centers

Ohio's utility commission ruled that tech companies must shoulder more of the upfront costs for electricity used by data centers, citing strain on the power grid and rising consumer energy bills.

Caroline O'Donovan reports for The Washington Post.

In short:

• The Public Utilities Commission of Ohio approved a plan requiring data centers to pay 85% of their projected energy usage up front, up from the previous 60%, to fund necessary grid upgrades.
• The decision rebuffed a tech industry-backed proposal that could have shifted infrastructure costs onto residential ratepayers, amid growing demand fueled by AI development.
• Consumer advocates and residents welcomed the ruling as a measure to prevent Ohioans from subsidizing large corporations' energy use.

Key quote:

“We are grateful that the PUCO acted today to protect residential consumers from bearing excessive costs caused by data centers. It’s a step in the right direction for Ohio consumers.”

— Maureen Willis, agency director of the Office of the Ohio Consumers’ Counsel

Why this matters:

The explosion of data centers, driven in part by the energy-intensive needs of artificial intelligence, is stressing the nation’s electric grid. These facilities run 24/7 and demand immense power, often outpacing local infrastructure upgrades. As utilities look to build new transmission lines and increase capacity, regulators face a critical question: Who should pay? Without cost-sharing rules, the burden often falls on households and small businesses, raising monthly bills. Ohio’s move could prompt other states to reevaluate who foots the bill for tech growth.

Related: States push new rules as data centers strain electric grids