American Electric Power Co. (AEP) has filed a proposal to Ohio regulators that would require new data center projects to make payment commitments for electricity.

New large data center developments would, under the proposal, have to make a 10-year commitment to pay for at least 90 percent of the energy that they requested, even if it isn't used, reports Bloomberg.

"We want to make sure the customers are going to be here before we invest billions of dollars on transmission,” AEP Ohio president Marc Reitter said in an interview.

Data centers are expected to double the power demand in AEP's central Ohio region by 2030 with around 5GW of new demand to connect to the grid.

Reitter said that AEP paused hookups for new data centers in March 2023 beyond the existing 5GW expected and currently has around 30GW of data center developments requesting connection.

Duke Energy Corp, headquartered in Charlotte, North Carolina, also recently started requiring a commitment similar to that proposed by AEP with operators needing to make up-front contributions to pay for new power infrastructure, and to sign "minimum take" clauses.

In April 2024, a Reuters report suggested that US electric utilities were anticipating a surge in power demands caused by data centers and generative AI.

Reuter’s analysis said nine of the top ten US electric utilities attributed customer growth and demand to data centers. Last year, only two of these companies referenced data center growth in their company forecasts. Executives from AEP told Reuters that the company’s retail customer demand grew 2.5 percent in 2023, much faster than its previous 0.7 percent projection. Once again, this was attributed to data center growth.

Meanwhile, DigitalBridge CEO Marc Ganzi recently warned that data centers will run out of power in the next 18 to 24 months.

In response to these concerns and the wider US grid's strain, the Department of Energy is currently looking to set up ten transmission corridors across the country to support the expansion of the grid.

Microsoft recently acquired more land in Columbus, Ohio, for data center expansion plans.

Columbus, Ohio, is becoming a major data center market, with the likes of Amazon, CyrusOne, Edged, Google, Meta, QTS, Aligned, and others building or operating data centers in the area. A DC Byte report recently identified New Albany - a suburb of Columbus - as the "data center capital of the midwest."