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As part of a proposed new delivery tariff for data centers, AEP Ohio is proposing that such customers would be served by a separate standard service offer (SSO) auction, and/or PJM market purchases, to the extent such customers do not take electric supply service from a competitive retail electric service (CRES) provider.

AEP Ohio is proposing a Data Center Power Tariff (Schedule DCP) that would be applicable to data centers with monthly demand of more than 25 MW, applicable to both new centers as well as expansions of existing load.

In addition, AEP Ohio is proposing a Mobile Data Center/Flexible Load Tariff (Schedule MDC/FLT) that would be applicable to Mobile Data Centers with monthly demand that is greater than 1 MW, applicable to both new centers as well as expansions of existing load.

In general, AEP Ohio proposes that, under the new tariffs, data centers and crypto/mobile data centers shall be required to make enhanced financial commitments to commence electric service. For example, data centers would be required to commit to ten-year electric service contracts and be required to pay minimum demand charges based on 90% of their contract capacity under the proposed tariff, rather than 60% that would otherwise apply under the current general service tariff.

As background, AEP Ohio in March 2023 paused accepting new service requests from data center customers so it could evaluate how they would affect the utility’s power delivery system.

AEP Ohio proposes that customers receiving service under both proposed tariffs noted above may select competitive supply service from a retail supplier (CRES), or be supplied by AEP Ohio, either under a special Standard Offer Service (SSO) applicable to data center customers (“Data Center SSO”), or through PJM market purchases.

The proposed Data Center SSO (and/or PJM market purchases) would only apply to non-shopping load under the new tariffs Schedule DCP and Schedule MDC/FLT, which, as noted above, apply only to new and expanded load. The Data Center SSO would not apply to, or include load from, existing data center load. Such existing data center load would remain eligible to be served in the regular SSO auction, and SSO auction winners would be responsible for serving such existing data center load if the load is not served by a competitive retail supplier.

AEP Ohio said that it expects that all data center customers under the proposed new tariffs will choose to be served by a competitive retail electric supplier.

However, for customers served under Schedule DCP, or under Schedule MDC/FLT and the customer is also above 25,000 kW monthly demand (collectively, “Data Center SSO Customers”), who do not select a CRES provider, AEP Ohio proposes to conduct a separate SSO auction for such customers (“Data Center SSO Auction”).

The Data Center SSO Auction would, via RFP, seek six-months of full requirements supply for applicable customers for the following terms: June 1 through November 30 and/or December 1 through May 31.

A Data Center SSO Customer would be served through PJM market purchases until such time as the supply under the Data Center SSO Auction begins (either due to the data center commencing operations before the Data Center SSO delivery terms’ hard-start dates of June 1 and December 1, or because an auction was not successful in procuring supplies).

Once placed on the Data Center SSO, a Data Center SSO Customer would be required to remain on the Data Center SSO for six months. For a Data Center SSO Customer to switch to a retail supplier, the Data Center SSO Customer would be required to provide notice at least 60 days before the end of the six-month Data Center SSO term. Failure to provide such notice would trigger a further six-month minimum stay under the following six-month Data Center SSO term.

“AEP Ohio proposes to conduct a separate SSO auction because including that load in the regular SSO auction could add unacceptable risk and complications for participating suppliers, thus increasing prices for all SSO customers.”

 Both tariffs require that customers participate in the PJM Emergency Demand Response program or AEP Ohio-declared emergency event, with customers subject to service disconnection if they do not respond.

AEP Ohio proposes a Data Center Power Tariff (Schedule DCP) applicable to data centers with monthly demand of more than 25 MW, applicable to both new centers as well as expansions of existing load.

As part of a proposed new delivery tariff for data centers, AEP Ohio is proposing that such customers would be served by a separate standard service offer (SSO) auction, and/or PJM market purchases, to the extent such customers do not take electric supply service from a competitive retail electric service (CRES) provider.

AEP Ohio is also proposing a Mobile Data Center/Flexible Load Tariff (Schedule MDC/FLT) that would be applicable to Mobile Data Centers with monthly demand that is greater than 1 MW, applicable to both new centers as well as expansions of existing load.

For customers served under Schedule DCP, or under Schedule MDC/FLT and the customer is also above 25,000 kW monthly demand who do not select a CRES provider, AEP Ohio proposes to conduct a separate SSO auction for such customers. 

AEP Ohio proposes to conduct a separate SSO auction because including that load in the regular SSO auction could add unacceptable risk and complications for participating suppliers, thus increasing prices for all SSO customers. In testimony a witness said that data center tariffs will require data centers to make long-term financial commitments — to have more skin in the game — to mitigate the risk that transmission infrastructure will be built for data centers.

Under AEP Ohio’s proposal, data centers would be required to commit to ten-year electric service contracts, with an option to pay an “exit fee” after five years.  Also, data centers would be required to pay minimum demand charges based on 90% of their contract capacity, up from 60% under the utility’s current general service tariff.  Mobile data centers, such as cryptocurrency mining operations, would be required to pay minimum demand charges based on 95% of their contract capacity.

Application
Testimony Of Matthew S. Mckenzie
Testimony of Kamran Ali
Testimony of Lisa O. Kelso
24-0508-EL-ATA  (Opened 05/13/2024)
In the Matter of the Application of Ohio Power Company for New Tariffs Related to Data Centers and Mobile Data Centers