Invasion of the “Hyperscalers” – or large-scale data centers – into Central Ohio is full-speed ahead with no end in sight. And there’s a looming question that many are not paying attention to, but should: Who is going to foot the bill for the extra American Electric Power (AEP) infrastructure and electricity needed by Amazon, Google, and Meta, to satisfy their hunger?

“The bottom line from a consumer protection perspective is, these data centers are the largest, richest, most powerful companies in the world, and they are going to consume a very large amount of electricity. And the consumer protection issue is, who is going to pay for all the infrastructure necessary to serve those big data centers and who will bear the risk in the event if something goes wrong?” Bill Michael told the Free Press, senior counsel with the Ohio Consumers’ Counsel.

Hyperscalers are oversized data centers jammed with thousands of servers which provide massive computing resources, storage capabilities, global networking, artificial intelligence, and cryptocurrency mining operations. Columbus has over 100 data centers, while Cleveland has 24, Cincinnati 22, and Toledo 2. Microsoft in October announced it will spend $1 billion for three new data centers, in New Albany, Heath and Hebron, while Amazon announced it will make an additional $10 billion investment in data centers across Ohio which will bring their total investment to $23 billion.

AEP is warning that the needs of Amazon, Microsoft, Google and others, will be “extreme” and “demand for power in the region [Central Ohio] will be similar to all of Manhattan.” AEP is also worried about “grid reliability” in that too many data centers could someday overload the region’s grid forcing power outages, akin to what happened during the steamy summer of 2022.

“Electricity demand in Central Ohio, driven largely by data centers, already is expected to more than double by 2030,” stated a recent AEP press release.

Last May, AEP filed a proposal with the Public Utilities Commission of Ohio (PUCO) which essentially asks PUCO to make hyperscalers pay for the extra infrastructure. New transmission facilities and extra-high voltage transmission lines, for instance – and not have residential customers cover the cost.

AEP also wants the data centers to pay in advance for power they expect to use with long-term contractual commitment, and an exit fee if their project is abandoned. AEP proposes data centers should pay for 85 percent of the power they plan to use and this would apply to new data centers with loads greater than 25 megawatts and cryptocurrency mining operations with loads greater than 1 megawatt.

Some may suggest that AEP asking the PUCO to make demands on the likes of Amazon is akin to letting the coyote guard the coop. Both utility and utility regulator have come under extreme public scrutiny – AEP’s rate hikes and PUCO’s corruption.

However, AEP’s proposal or “settlement agreement” to PUCO is supported by several major pro-consumer orgs, such as the Ohio Consumers’ Counsel (or OCC, a State of Ohio agency), the Ohio Partners for Affordable Energy, and, according to the OCC’s Michael, PUCO staff members.

“The settlement we signed on to allocates the risk and cost as much as possible to the data centers. The data center’s settlement is not as protective of consumers in that it shifts more risk and potential cost to consumers verses the data centers,” said Michael.

Following AEP’s request to PUCO, a coalition of data center stakeholders, including Amazon, Microsoft and Google, filed their own “settlement agreement” with PUCO. They proposed paying for a minimum of 75 percent of planned power usage.

The PUCO five-member commission, appointed by Governor DeWine who has been a vocal supporter of data center investment, should take a vote on the settlements later this year. DeWine and JobsOhio love to ballyhoo Amazon and Meta, saying their capital investments into Central Ohio continue to further the region as a tech hub of the Midwest.

But are data centers worth compromising Central Ohio’s “grid reliability”? No doubt, good paying jobs are always needed. Yet data centers bring far less jobs than factories and offices.

During recent testimony by AEP regarding their PUCO settlement, data centers support less than one direct full-time job per 1 megawatt of electricity used. Large industrial or commercial customers provide 25 full-time jobs per 1 megawatt used.

“The amount of jobs that are purportedly created by a data center just aren’t that large in comparison to the amount of investment that’s serving them is going to require. When you think about it, data centers are just big warehouses filled with computers,” said Michael.