Ohio Market

Market Deep Dive

Central Ohio: A Hyperscale Cluster Built on Contract Discipline

Central Ohio — New Albany, Columbus, and the surrounding Licking and Franklin County corridor — has become one of the premier U.S. data center markets, anchored by Microsoft, Google, Meta, and AWS. The defining story in 2025–2026 is not demand volume but how AEP Ohio and the Public Utilities Commission of Ohio (PUCO) forced discipline into a speculative pipeline.

Before its Data Center Tariff, AEP Ohio had received data center requests totaling more than 30,000 MW — an unprecedented figure for a utility whose all-customer peak demand runs only 8,000–10,500 MW. As of February 12, 2026, AEP Ohio reported 17,861 MW of contracted data center projects: 12,219 MW signed before the tariff plus 5,642 MW signed under it, scheduled to come online progressively through 2035.

The demand mix is unusually top-heavy. A single AWS campus program — built out across multiple central-Ohio sites — anchors the pipeline alongside Google and Meta expansions, and CBRE has repeatedly ranked Columbus among the fastest-growing secondary markets in North America by absorption. What distinguishes Ohio from boom markets like Atlanta or Phoenix is the contract discipline: nearly every megawatt in AEP Ohio's pipeline sits under a signed electric-service agreement with minimum-take provisions, which is precisely what makes the 17,861 MW figure credible enough to plan against.

Sources: AEP Ohio PUCO filings; CBRE Columbus market reports; company announcements.

Project Pipeline: Hyperscaler Commitments Around New Albany

Central Ohio's pipeline is anchored by genuine hyperscale balance sheets rather than speculative developers. Amazon has committed on the order of $10 billion to Ohio data center expansion by 2030 — building on a $7.8 billion plan announced in 2023 — while Google has invested $2.3 billion across three Columbus-area campuses and Meta operates its New Albany campus as part of a multi-building buildout Confirmed.

The tracked project on this site is the Ohio AI Data Center, a 500 MW campus in permitting with an estimated $4 billion build cost Probable. The wildcard remains Intel's Ohio One fab in New Albany — announced in January 2022 at $20 billion (later scoped toward $28 billion), repeatedly delayed, but still the anchor tenant around which the region's power and water planning was sized Possible.

Sources: Amazon, Google, Meta and Intel announcements (2022–2024); DataPowerDemand project tracking; Columbus Dispatch.

The PUCO Data Center Tariff: A National Template

Approved by the PUCO in mid-2025, AEP Ohio's Data Center Tariff is the most influential large-load cost-allocation framework in the country. It requires large data centers (25 MW and above) to pay for at least 85% of contracted capacity for up to 12 years, even if they use less, demonstrate financial viability, and post collateral and exit fees. The goal is explicit: right-size infrastructure and protect residential, commercial, and industrial customers from paying for an overbuilt system.

The filtering effect was dramatic. Of the ~30,000 MW that expressed interest before the tariff, 13,022.7 MW paid for a formal engineering study (step one), and just 5,642 MW ultimately signed binding contracts (step two). AEP Ohio paused new development while the tariff was designed, and argues the framework is now working as intended — screening out speculative projects while letting committed ones proceed.

The mechanics matter beyond Ohio. Under the settlement framework — which the Commission approved in 2025 — data centers above 25 MW pay for at least 85% of contracted capacity for up to 12 years, including transmission and distribution charges, with sliding-scale provisions and exit fees for campuses above 1,000 MW. The structure effectively converts speculative interconnection requests into bankable, long-term revenue commitments, and it has become the reference point as Georgia, Arizona, and Indiana weigh similar frameworks. Developers accept the terms because contract certainty beats queue purgatory; utilities accept them because the minimum-take floor insulates ratepayers if AI demand under-delivers.

Sources: PUCO Case 24-508-EL-ATA settlement (Oct 2024) and Commission order (2025); Utility Dive; RTO Insider.

AEP Ohio Deep Dive: From 30 GW of Requests to a Contracted Queue

AEP Ohio's filings trace the market's whiplash. Before the tariff, speculative interconnection requests exceeded 30,000 MW against a system coincident peak of roughly 8,000–10,500 MW. The tariff's engineering-study payment requirement filtered that to 13,022.7 MW of serious, contracted pipeline — still a figure that would more than double the zone's peak load Confirmed.

The utility's response is a transmission-led capital program: 765 kV backbone strength inherited from AEP's historic system, new 345/138 kV substations around Licking and Franklin counties, and multi-year transformer and switchgear procurement. AEP has told investors that data center demand is the largest single driver of its service territory's load forecast, and that the tariff structure lets it plan against contracted rather than speculative megawatts Confirmed.

The strategic consequence: Ohio now prices certainty. A hyperscaler that pays for a study and signs a 12-year commitment gets a firm power date; everyone else waits. That is precisely the discipline PJM's queue process lacks on the generation side — see our interconnection queue explainer for the parallel.

Sources: AEP Ohio PUCO update (Feb 2026); PUCO Case No. 24-508-EL-ATA record; AEP investor materials.

PJM and Transmission: The Eastern Constraint

AEP Ohio sits in PJM, which means Ohio data centers pay the same capacity-market prices that spiked after the 2024 auction reforms: the 2025/26 Base Residual Auction cleared at $269.92/MW-day and 2026/27 at $329.17/MW-day, costs that flow through to Ohio ratepayers and sharpen the politics of large-load growth Confirmed.

Within the zone, the binding constraints are substation positions and 138/345 kV egress from the New Albany area rather than bulk transmission. AEP's queue-management filings show study timelines stretching as developers cluster requests in the same substation footprints Probable. The practical effect is a westward and southward push of new site selection toward less congested parts of the AEP Ohio footprint.

The practical bottleneck is substation delivery, not bulk energy. Utilities across PJM report circuit-breaker and power-transformer lead times of 18–36 months Estimated, and AEP Ohio has told regulators that even contracted load will energize in phases through the late 2020s as new 345 kV and 138 kV stations come online. The 765 kV backbone that runs through central Ohio — part of AEP's historic extra-high-voltage network — gives the region a structural advantage over peers, but the last-mile stations near New Albany and Johnstown are the pacing item for most campus timelines.

PJM's 2025/26 capacity auction cleared at $269.92 per MW-day — roughly nine times the prior year — and the 2026/27 auction cleared at $329.17 per MW-day, tightening the region-wide capacity picture that Ohio data centers draw from. Those prices flow directly into the cost of new supply and sharpen the PUCO's cost-allocation question: who pays for capacity procured to serve load that may not fully materialize.

Sources: AEP Ohio PUCO filings; PJM RTEP; PJM Base Residual Auction results (2025/26, 2026/27).

Generation and Supply: Capacity Prices, Gas, and the Nuclear Question

Ohio is a deregulated generation market, so AEP Ohio buys capacity through PJM rather than building it. That leaves supply response to independent producers: gas-fired projects announced across the PJM footprint, battery storage interconnections, and — increasingly — advanced-nuclear interest from hyperscalers with Ohio load Probable.

State policy has tilted supportive: Ohio's 2025 energy legislation restructured ratemaking and signaled openness to new dispatchable generation, while the PUCO tariff effectively guarantees cost recovery for grid investments that new plants would interconnect to Probable. The open question is timing — PJM's generation interconnection queue, not Ohio's tariff, is now the slower queue.

On supply, AEP has framed the resource answer as a mix of new gas-fired generation, market purchases, and longer-term interest in advanced nuclear. Ohio's 2023–25 energy debates reopened the door to nuclear development: the state has studied advanced reactor siting, and utilities including FirstEnergy have evaluated restarting or uprating existing nuclear assets Possible. No SMR project in Ohio has a construction schedule; treat any near-term nuclear contribution as aspirational.

Behind-the-meter options are getting more attention as queue timelines stretch. Fuel-cell and gas-fired self-supply concepts have surfaced in Ohio site plans, echoing the national shift toward on-site generation strategies when grid power lags campus construction. Expect the PUCO to scrutinize any arrangement that shifts stranded-asset risk to other ratepayers.

Sources: AEP investor communications; PUCO docket 24-508-EL-ATA testimony; Utility Dive.

Regulatory Context: Why Ohio Moved First

Ohio's tariff fight did not happen in a vacuum. The state's utility politics were already bruised by the House Bill 6 scandal (2019) — the nuclear-bailout law later partially repealed amid a federal racketeering case — which left the PUCO and legislature acutely sensitive to claims that utilities socialize costs for private benefit. That history shaped the data center docket: commissioners framed Case 24-508-EL-ATA explicitly around protecting residential customers from speculative-load risk.

The result is the country's most formalized large-load contract regime: 85% minimum demand charges, 12-year terms, and exit fees for data centers above 25 MW, with a sliding scale for the very largest campuses. Other commissions — notably Georgia's PSC and Arizona's ACC — have cited the Ohio framework in their own proceedings, which is why the docket's implementation details matter nationally. See our utility tariff explainer for the mechanics.

Sources: PUCO docket 24-508-EL-ATA (filed May 2024; settlement Oct 2024); Ohio legislative record; Utility Dive.

Water, Land, and Siting

Ohio's underappreciated advantage is water. Unlike Phoenix or parts of Texas, central Ohio campuses can support evaporative cooling at scale without stressing allocation systems — an efficiency lever as AI rack densities climb. The trade-off is land: the New Albany–Johnstown corridor has seen industrial land prices re-rate sharply on data center demand, pushing later entrants toward Licking County exurbs and secondary markets Estimated.

Siting friction is rising but remains modest by coastal standards. Township-level zoning fights have slowed individual projects, and local officials increasingly demand substation cost-sharing and water-use disclosures. None of it amounts to a Loudoun-style moratorium debate — yet — but developers now budget meaningfully longer entitlement timelines than they did in 2022 Estimated.

Sources: Local reporting (Columbus Dispatch, Columbus Business First); company site filings.

Competitive Positioning and the 12–24 Month Outlook

Central Ohio competes with Northern Virginia on reliability and with Georgia on utility partnership. Its differentiators are real: a filtered, contracted queue that gives credible power dates; abundant flat land with water access; and a state government that has recruited hyperscalers aggressively. Its risks are equally clear: PJM capacity costs, dependence on a single utility's execution, and the possibility that Intel's delays leave over-built infrastructure Probable.

Over the next 12–24 months, watch the tariff's first compliance filings (do 13 GW of contracted load actually materialize?), AEP's substation delivery cadence around New Albany, and whether Cleveland/Akron emerge as a second Ohio node on FirstEnergy territory. Our utility tariff analysis benchmarks Ohio's framework against Georgia's and the proposals now spreading to other states.

Against its peer set, Ohio's pitch is firm contract power in a constrained region: more expensive and slower than Texas on paper, but with clearer rules after the PUCO settlement and far more deliverable than Northern Virginia's effectively zero-vacancy market. Columbus is the gravity well; Cleveland and Akron remain secondary targets where older industrial sites offer fiber and substation headroom at lower land cost Estimated.

The 12–24 month watch list: (1) whether AEP Ohio converts more of its contracted pipeline into energized load; (2) PUCO implementation rulings and any appeals of the tariff framework; (3) PJM capacity auction trajectory and its pass-through to large-load economics; and (4) whether Intel's schedule stabilizes — a firm fab timeline would re-accelerate the entire New Albany supplier ecosystem.

Sources: CBRE market reports; PUCO docket 24-508-EL-ATA; PJM auction results; company announcements.

Outlook

Central Ohio will continue to absorb committed hyperscale capacity, but the era of unfiltered 30 GW request queues is over. The rest of the country is watching Ohio's tariff as a template for large-load cost allocation. Key indicators: how quickly AEP builds the transmission and substation capacity to serve the contracted 17.9 GW through 2035; whether other PJM utilities adopt similar tariffs; and whether the "world's first 1 GW+ single data center" projects slated for the Columbus corridor materialize on schedule.

Bottom line: Ohio has traded raw speed for bankability. The market will likely energize less headline capacity than Texas over the next two years, but a higher share of what it announces should actually get built — and the PUCO framework gives investors an unusually clear view of who pays if the AI load thesis breaks. For sellers of transformers, switchgear, and backup generation, that makes central Ohio one of the lowest-ambiguity demand pools in the country: a contracted queue, a defined tariff, and a utility that must build through it. Track the project-level detail on our projects tracker and the peer-market comparison across all tracked markets.