Questionable data center forecasts are driving up Ohio power bills

Ohio power bills are rising in part because of data centers that may never actually get built. American Electric Power's Ohio utility expects electricity demand in the state to nearly triple over the next decade, mostly because of planned data centers. But researchers and manufacturing groups question whether these forecasts are realistic, since computing tends to get more efficient over time, developers often pitch the same project in multiple states, and demand for AI services is uncertain.

These inflated forecasts matter because they get used to justify big spending that ends up on customer bills. In the regional grid serving Ohio and a dozen other states, capacity charges — payments that keep power plants ready for peak demand — have jumped more than tenfold since last year, largely because grid operators expect a surge in demand that may not materialize. Utilities also use these forecasts to justify building new power lines now, and in Ohio, no independent body reviews whether those "supplemental" transmission projects, which can cost billions, are actually needed. A state consumer advocate has been pushing federal regulators for three years to require more scrutiny of these costs, without much progress so far.

For homeowners, the upshot is straightforward: if the data center boom falls short of projections, Ohioans could still be paying for grid upgrades and capacity that turned out to be unnecessary. Critics argue that new investment should come from the businesses driving the demand, not get passed automatically onto existing customers' bills.