VOICES: FERC ruling sets up reliable energy grid, cost savings for Ohio consumers

As Ohio’s energy landscape undergoes a significant shift with the surge in data centers, a recent ruling by the Federal Energy Regulatory Commission (FERC) couldn’t have come at a more opportune moment. The proposal by AEP Ohio to tackle the growing demand for electricity from data centers highlights the urgent need for robust planning and infrastructure investment. FERC’s ruling, designed to adapt to the evolving energy landscape and respect state autonomy, holds the promise of a more robust, dependable, and cost-efficient energy infrastructure. Its potential benefits are tangible – imagine a future with significantly fewer power outages during extreme weather events. This rule is a beacon of hope for Ohio, offering us the freedom to shape our energy journey while reaping the rewards of a more resilient and reliable grid.

AEP’s request for data centers to commit to a minimum of 90% of the electricity they request, even if they use less, underscores the magnitude of the challenge posed by these energy-intensive facilities. As demand for computing power skyrockets due to advances in artificial intelligence and other technologies, Ohio’s diverse energy mix positions us to be a major beneficiary of FERC’s ruling. The requirement for public utility transmission providers to consider long-term scenarios and the impact of extreme weather is a game-changer for our energy grid’s resilience. We’ve witnessed the havoc extreme weather can wreak on energy infrastructure, and FERC’s foresight in accounting for these possibilities over a planning horizon of at least 20 years ensures we’re not caught off guard. This level of preparedness is invaluable for a state like Ohio, where, as we have seen in recent weeks, weather can be unpredictable.

Moreover, the rule’s emphasis on transparency and non-discriminatory criteria for selecting transmission facilities for cost allocation is a win for Ohioans. The regional approach, with a focus on reliability, resilience, and long-term demand, empowers Ohio to identify and address its unique transmission needs without being forced into a one-size-fits-all model. This flexibility is critical for Ohio, as it allows us to pursue energy solutions that align with our state’s economic and environmental goals. For instance, it could attract more energy-intensive industries to our state, boosting our economy and creating jobs.

The new rule’s cost allocation requirements also provide a fair and equitable path forward. By seeking agreement from relevant state entities and considering a comprehensive set of benefits for transmission projects, FERC ensures that the cost burden is shared appropriately. The “beneficiary pays” approach means that Ohioans won’t be on the hook for projects that don’t benefit our state. This is a crucial component, as it respects state authority and avoids unnecessary financial burdens on our residents, providing a sense of security and protection.

While the rule is forward-thinking, it is also careful not to overstep its bounds. FERC’s jurisdiction over the transmission of electric energy in interstate commerce is clear. Still, it does not dictate that transmission must be built. This ensures that Ohio retains control over its energy decisions, with guidance from a more standardized and long-term study of transmission needs. The rule’s focus on planning for reliability and resilience, rather than prioritizing clean generation sites, empowers Ohio to continue its balanced approach to energy production and consumption.

Ultimately, this ruling represents a balanced and thoughtful approach to energy infrastructure that ought to be commended. It acknowledges the importance of regional transmission planning while respecting state authority. For Ohio, this means a more reliable energy grid, cost savings for consumers, and the flexibility to pursue our energy goals without undue federal interference.

As we move forward, Ohio’s energy stakeholders should embrace this opportunity to work collaboratively within the regional framework set by FERC. By doing so, we can create an energy system that meets our needs today and adapts to the challenges of tomorrow. The path ahead is bright, and Ohio is ready to lead the way.

Shayna Fritz is the Executive Director of the Ohio Conservative Energy Forum.

About the Author