Data Center Site Selection in Ohio: AEP Ohio’s Tariff, PJM Costs and the Tax Pause

Ohio’s data center market is concentrated in Central Ohio, around Columbus, New Albany, Hilliard, Dublin and western Licking County. The draw has been large flat tracts, fiber, a business-friendly incentive program and transmission in the AEP Ohio service area. Demand outran supply quickly: before AEP Ohio’s data center tariff took effect, the utility cited more than 30 GW of initial data center interest, and it had paused new Central Ohio data center agreements while the tariff was being decided.²¹

Ohio is also a PJM state, which means capacity and transmission costs are set in part by a regional market rather than by the state utility alone. That distinguishes Ohio from vertically integrated states like Georgia and places it alongside Virginia, Pennsylvania and Indiana. Our PJM regional guide covers the market rules that apply across all of them.

Outside AEP Ohio, the state is served by other investor-owned utilities, cooperatives and municipal systems, each with different large-load terms. Confirm the utility service territory of every parcel before comparing sites.

On July 9, 2025, the Public Utilities Commission of Ohio (PUCO) approved a stipulation backed by AEP Ohio, PUCO staff, the Ohio Consumers’ Counsel and several industrial groups, after evidentiary hearings in December 2024 and January 2025.¹ Amazon, Google, Microsoft and Meta opposed the settlement and offered an alternative, which the commission rejected; PUCO found that the AEP-backed framework better assigned infrastructure costs to the customers causing them.¹ The tariff targets data centers with loads above 25 MW.¹¹

• Minimum demand: new data center customers pay for 85% of the power they subscribe to, even if they use less.¹
• Term: obligations last up to 12 years, including a four-year ramp-up period.¹
• Credit: owners must show they are financially viable and able to meet the obligations.¹
• Exit: an exit fee applies if a project is canceled or cannot meet its obligations over the contract term.¹

The financial commitment did what it was designed to do. When the tariff took effect, developers filed formal load study requests for about 13,023 MW across 36 sites, and by a February 12, 2026 letter to PUCO, AEP Ohio reported 5,642 MW of signed data center agreements: 4,842 MW in Central Ohio and 800 MW elsewhere in its territory, with projected in-service dates by 2030.² AEP said the modified load figures will now be used for PJM transmission planning.²

Across all of AEP, the parent company reported 7 GW of new load agreements signed in the first quarter of 2026, mainly in Ohio and Texas, and expects incremental load to reach 63 GW by 2030.¹² For site selection, the lesson is that an Ohio power request is now a balance-sheet commitment. Size the request to a realistic ramp; see load ramp schedules, utility load studies and large-load tariffs and electric service agreements.

On July 14, 2026, PJM reported that its 2028/2029 Base Residual Auction procured 138,318 MW of unforced capacity, clearing at $325/MW-day, the FERC-approved cap for the whole footprint and 2.5% below the prior auction’s $333.44/MW-day cap.³ It was the third consecutive auction under the price collar, and procured capacity, including Fixed Resource Requirement resources, fell 6,831 MW short of the reliability requirement.³

Capacity charges flow into retail bills for most Ohio customers, and a shortfall raises the odds of new rules that ask large loads to bring or pay for supply. When you compare an Ohio site with one in a non-PJM state, include the capacity component and the risk that it changes. Our PJM capacity prices and data center load growth and electricity rates for data centers guides go deeper.

Ohio’s House Bill 15, the 2025 omnibus energy law, loosened restrictions on behind-the-meter generation and lowered the tax burden for new power plants.⁷ PUCO’s chair told the House select committee on data centers in May 2026 that the law expanded the types of generation that can power businesses and allowed more flexibility when the generator is not on the same site as, or directly adjacent to, the customer.¹³ The chair also noted that data centers are still served within the industrial or commercial customer class rather than a class of their own.¹³

Developers are using the opening. A gas-fired plant of up to 120 MW has been proposed in western Licking County to serve a data center in the New Albany International Business Park.⁸ On-site generation adds gas supply, air permits and neighbor concerns to the site checklist. See behind-the-meter vs. front-of-the-meter power and on-site generation and bridge power.

Ohio’s data center sales tax exemption is granted through the Ohio Tax Credit Authority.⁴ In 2025 the legislature removed the exemption in the state budget bill, HB 96, but Governor DeWine vetoed that provision, so the exemption survived.⁶ In March 2026, the House speaker said Republican leaders were counting votes to override the veto, but the House postponed the vote; we found no report of a completed override as of October 2026.¹⁴

On May 27, 2026, DeWine directed the Tax Credit Authority to stop considering new data center exemption requests submitted after its next meeting.⁴ Exemptions already approved remain in effect, and the pause does not prohibit data center development; it is tied to a joint legislative data center committee charged with reporting recommendations within six months.⁴

Ohio’s township zoning gives small jurisdictions real control. In February 2026, the Licking County planning commission unanimously supported a St. Albans Township zoning change that would effectively ban data centers by removing them from conditionally permitted uses.⁵ In September 2026, Pierce Township trustees extended a zoning moratorium on data center uses to May 31, 2027.¹⁵ Check every township and municipality along a candidate site, not just the county, and read our moratoriums and local restrictions guide.

Water is less constraining in Ohio than in the arid West, but it is not free of limits. Columbus is evaluating non-potable reuse to support industrial growth and preserve drinking water, including a centralized facility that could produce 20–40 million gallons a day of reclaimed water for uses such as data center cooling.¹⁶ For a Central Ohio site, confirm water and sewer capacity with the provider in writing. See municipal water and sewer capacity and reclaimed water for cooling.

Ohio funds infrastructure for project-ready sites through the All Ohio Future Fund, a $750 million program launched in 2024 and administered by the Ohio Department of Development.⁹ Awards are mainly 0% interest, partially forgivable loans; the guidelines favor publicly owned sites, sites meeting JobsOhio certification criteria and sites of 30 acres or more, and funds cannot be used to buy land or construct buildings.⁹

One award shows the pattern for data centers: the state Controlling Board released $58,752,504 to the Coshocton County Port Authority for site preparation, roads, utilities and water and wastewater work at the former Conesville Power Plant, to prepare an industrial park for manufacturing, a data center and power generation.¹⁰ Retired plant sites can offer transmission and water, but bring environmental and title questions; see repurposing industrial and power plant sites and certified sites and shovel-ready programs.

1. 01Identify the electric utility. In AEP Ohio territory, plan for the data center tariff’s 85% minimum demand, up to 12-year term and credit requirements.¹
2. 02Ask what is already contracted near the site; Central Ohio holds most of AEP Ohio’s signed data center load.²
3. 03Include PJM capacity costs, and the chance they rise, in power cost models.³
4. 04Check township and municipal zoning and any moratoriums before signing an option.⁵¹⁵
5. 05Model the sales tax exemption as paused for new requests.⁴
6. 06If on-site generation is part of the plan, test gas supply and HB 15 eligibility early.⁷¹³
7. 07Confirm water, sewer, fiber, buildable acreage and drainage on the specific tract.

Our methodology explains how we weigh these factors, and you can get a site reviewed before you file a load study request.