Around Ohio, utility bills are climbing and the strain families are feeling could help decide November’s election. To voters, utility bills are a straightforward problem: higher is bad. Although that equation is simple, untangling the forces driving bills higher is anything but.
Policies at the state and federal level play a significant role, as do decisions by PJM Interconnect, the 13-state electric grid operator serving Ohio. Data centers, in particular, have become the physical embodiment of ratepayers’ frustrations — gobbling up tax incentives in exchange for higher energy costs and sprawling, bland buildings.
Politicians have a long list of fixes. They’ve proposed a range of restrictions for data centers, new requirements for state regulators, expanded assistance programs and streamlined permitting.
Republican candidate for governor Vivek Ramaswamy has even promised free electricity for residents living near data centers, though experts are unsure how this can be accomplished legally and constitutionally.
No matter how big the promises get, Ohio’s leaders can’t wave a magic wand and ‘solve’ rising utility costs, but their decisions over the next several years could have a significant influence on what your bills look like.
What’s in my bill?
The Public Utilities Commission of Ohio maintains an online dashboard detailing utility costs by city. Last month, 15 of the 16 metro areas listed reported higher year-over-year electric bills. Cleveland and Ashtabula led the pack with a 28.1% increase; Cincinnati was the lone exception, more or less holding steady with a decline of .4%.
A recent report from state Auditor Keith Faber noted statewide average energy prices have more than doubled since 2001, and in the past five years alone, they’ve climbed 34%.
The array of charges on to residents’ bills varies around the state, but generally speaking, utility bills break down into three categories: generation, transmission, and distribution.
Generation is the cost of power itself, including the price of electricity we actually use as well as reserve capacity. Transmission is the cost of high voltage power lines — think the tall steel lattice type structures — while distribution covers the cost of the “last-mile” power network typically strung along wooden utility poles.
Because demand is high, generation costs have grown, and Ohio Consumers’ Counsel Maureen Willis said it has happened in two ways.
First, imagine all the power plants in the 13-state PJM footprint stacked up based on price. As PJM contracts energy to meet demand, it moves up that energy stack to higher bids. The bid it eventually lands on sets the overall market price.
PJM compares the pricing model to a taxi ride. When demand is low, it’s like hailing a ride in light traffic, “you can expect a consistent and predictable taxi fare.” But as traffic grows — or demand for electricity grows — the fare climbs higher.
Second, PJM runs an annual auction for reserve power when demand peaks. Naturally, that auction relies on forecasts to determine future demand, and data centers have had a significant impact.
Willis pointed to a report from PJM’s independent market monitor, which found data centers accounted for $29.4 billion in higher capacity costs over the past four auctions.
At the transmission level, oversight gets shared among PJM, state regulators, and the federal government. Even with all that attention, Willis said, there’s a problem.
“No one is reviewing those (projects) for prudence, need, or cost effectiveness,” she said. “There’s a gap — what we call regulatory gap.”
A utility generally has to demonstrate its investments are “prudent and reasonable” and “used and useful” to pass costs on to customers. The Federal Energy Regulatory Commission has final authority over transmission rates, but many projects follow a less onerous “supplemental” process overseen by PJM.
“PJM’s analysis is a do no harm analysis,” Willis explained. “All it says is we’ll allow this project to go on as long as it doesn’t harm existing transmission.”
Without more rigorous review, Willis contends, utilities have an incentive to invest in projects that are profitable for them, but expensive for consumers.
In 2023, Willis’ office filed a complaint about that lack of oversight FERC. The commission has yet to take action.
And the price tag for transmission projects isn’t small change. Between 2017 and 2025, Willis said, Ohio utilities passed along $16 billion in new transmission expenses to consumers.
According to reporting from Cleveland.com, more than $10 billion of that total went through PJM’s supplemental process. Many of those projects are high voltage lines built to serve data centers.
The phenomenon isn’t limited to Ohio. Nationwide, utilities are planning $1.4 trillion in new transmission projects by 2030. Those projects will eventually land on ratepayers’ monthly bills.
“We could end up with stranded costs,” Willis warned, “where you build a system for a customer — huge transmission line, hundreds of millions of dollars, perhaps even billions — and then that customer leaves early, or the business doesn’t pan out.”
Oversight for distribution rates falls to the Public Utilities Commission of Ohio. While the dollar figures are often smaller, Willis still worries about utilities billing for upgrades that don’t make enough of a difference.
Willis brought up FirstEnergy’s Distribution Modernization Rider. The company collected almost half a billion dollars from customers, but couldn’t account for how it actually spent the money. The Ohio Supreme Court struck down that fee in 2019.
More recently, FirstEnergy asked state regulators to reduce its reliability standards — allowing for more and longer outages to occur. This came after the utility billed ratepayers nearly $1 billion for grid modernization projects, Willis said, “based on the assumption that reliability would get better.”
Willis’ office along with the cities of Lakewood and Barberton challenged FirstEnergy, and in June the PUCO rejected the proposed changes. FirstEnergy has appealed.
To Willis, it’s too easy for utilities to get an idea greenlit and start charging customers.
“We have not seen the benefits,” she said, “but we pay for the benefits ahead of time.”
Ramaswamy’s promises
Republican candidate for governor Vivek Ramaswamy promises to bring electric bills down by increasing the supply of energy.
To do that, he’ll “expand natural gas and deploy innovative energy technologies,” in addition to streamlining Ohio’s permitting process “so projects get built on time and on budget,” he’s said.
Ramaswamy also announced an “Ohioans-first” data center pledge including free power for nearby residents and reduced property taxes.
Data centers would be held to all air and water quality standards “without exception,” he said. Those changes would require legislation, but Ramaswamy promised an executive order banning data centers until that law can take effect.
“Eliminating electricity costs is the right objective,” Ramaswamy’s pledge asserts.
He contends that if the governor sets that goal and “negotiates accordingly,” hyperscale data center developers will “fully cover the cost of power for Ohioans who reside near a data center.”
Ramaswamy suggested data center developers will build power plants behind-the-meter and then contribute excess power to grid. He’s banking on the surplus being enough that “most of Ohio’s counties would fit entirely within a benefit zone” meaning the entire county would get free power.
The Ohio Capital Journal sent Ramaswamy’s campaign multiple emails requesting details — how do we determine how many neighbors get free power? And for how long? — but the campaign didn’t respond.
In an interview with the Statehouse News Bureau, Ramaswamy clarified his plan would cover the power generation portion of residents’ bills, but not distribution and transmission charges.
Ashley Brown is a former PUCO commissioner and former executive director of the Harvard Electricity Policy Group at the Kennedy School. He dismissed Ramaswamy’s proposals as misguided and said the data center pledge was “doomed to fail.”
Ohio already has “incredible” access to natural gas, Brown said. Increasing supply won’t make rates worse, he said, but it probably won’t make a huge difference.
Remember the energy stack that sets the price of power? Brown explained that renewable energy sources like wind and solar can bid close to zero, and that helps hold down the price of energy generation overall.
“I’m laughing because (Ramaswamy’s) running mate, (Ohio state) Sen. (Rob) McColley, sponsored the bill that makes it almost impossible to site solar farms in Ohio,” Brown said, “and makes it difficult — not quite impossible, but very difficult — to site wind farms.”
That bill, Ohio Senate Bill 52, allows local officials to intervene in the Ohio Power Siting Board process to block solar or wind farms. They have no similar authority when it comes to other power sources.
According to OPSB data, since the bill became law in 2022, eight solar projects representing 1.29 gigawatts of power have been denied. For context, that’s 45% of the 2.84 gigawatts in new generation Ohio installed between 2022 and 2025.
Despite Ramaswamy’s confidence, Brown has doubts about data center developers signing on to provide free power, and he warned it would actually hurt the market if they did.
“The generation (market) is very competitive,” Brown said. “And now he’s going to give a monopoly in communities — however that’s defined — to a data center to be a monopoly utility, but it’s required to give away all of its product. What is that? That completely destroys the market.”
The arrangement would lead to higher prices and volatility in the supply of power, Brown said.
“It’s not a serious plan,” Brown said. “It’s so obviously doomed to fail that it just makes no sense.”
Acton’s promises
Democratic candidate for governor Amy Acton proposes more energy production, too. Unlike Ramaswamy, she emphasized “incorporating the lowest-cost and cleanest sources of energy.”
She said she’d also overhaul PUCO membership with an eye toward closing the “revolving door,” and expand access to lifeline programs like Ohio’s Percent of Income Payment Plan and the Home Energy Assistance Program.
In an email, a campaign spokeswoman said Acton would push eligibility from 175% to 200% of the federal poverty level.
Ohio’s PIPP program is the oldest of its kind in the country, and Brown helped come up with the idea. He said Acton is right to propose expanded eligibility.
“Is that important overall to the state’s economy? Yeah, but it’s extremely important to low-income people and to maintaining their quality of life but also health,” Brown said.
Acton promised to make data centers to pay their own way “so the burden doesn’t fall onto Ohio families or businesses,” and rein in their tax incentives.
She’s talked about issuing a conditional moratorium on data centers.
In addition to covering utility costs, Acton’s rubric would require data centers build with union labor on brownfields. Developers would also have to abandon nondisclosure agreements and meet existing environmental standards.
“If companies cannot meet these rigorous standards,” Acton’s campaign said, “they have no business working in Ohio.”
It’s a set of demands popular across the political spectrum.
A bipartisan data center overhaul that stalled out in the statehouse this summer ticked many of those boxes, and Libertarian candidate for Don Kissick raises very similar critiques. Ramaswamy has even accused Acton of “parroting” positions he took before expanding his plan to include free power.
To Brown, ensuring data centers actually pay for new infrastructure is a more realistic goal than promising free power.
“What she’s proposing is a commonsense remedy that’s been there all along,” he said, “and for a lot of reasons, political and otherwise, they haven’t really been applied. Ohio is not unique. What I’m talking about is (happening) nationally.”
What should officials do?
The Ohio Consumers’ Counsel is a nonpartisan position working on behalf of all the state’s ratepayers. So, Counsel Willis declined to weigh in on the candidates’ plans. But she did offer a handful of recommendations that policymakers at the state, regional, and federal level could do that she believes would help Ohioans.
Last year, state regulators approved a data center tariff for AEP Ohio. That billing arrangement requires data centers to cover new infrastructure and pay an exit fee if they back out early.
Lawmakers from both sides of the aisle are backing legislation to extend those requirements statewide and Willis thinks that would be a good idea.
Willis also praised a bipartisan measure requiring an independent review of utilities’ demand forecasts.
“If you’re over-forecasting, you’re over-procuring,” she said, and usually consumers wind up with the bill.
When the Public Utilities Commission of Ohio sets rates, commissioners have to determine what is “just and reasonable.”
Willis contends affordability needs to be a central part of that discussion, but it often isn’t. It’s a similar story at PJM, Willis said, where the guiding principle is reliability.
“No one will say no to that one, but reliability should be a given,” Willis said. “It should be yes, we’re going to be reliable, but we also have to keep our eye on affordability and what’s in the public interest, and that is not written into their charter.”
When it comes to FERC, Willis’ ask is simple — do something about their transmission complaint.
“FERC has an obligation to establish just and reasonable rates,” she said, “and when no one’s looking at $10 billion worth of investment that’s just not right.”
Originally published by the Ohio Capital Journal. Republished here with permission.