Utilities Allocate Grid Costs To Data Centers

In a 2023–2025 regulatory dispute, AEP Ohio paused new data center interconnections in March 2023 and implemented a mid-2025 tariff requiring 12-year take-or-pay contracts for facilities of 25 megawatts or more. The tariff froze over 50 proposed projects representing more than 30 gigawatts initially, with later demand forecasts revised to about 13 gigawatts. The episode highlights allocation and governance challenges as rapid AI-driven demand strains long-lived grid planning.