“Some of the richest companies in the world are using Ohio’s electric grid like an unlimited power outlet while taxpayers pick up the tab,” Innovation Ohio President Michael McGovern said.
Research and advocacy nonprofit Innovation Ohio is urging state lawmakers to take a harder line with data centers. A new report calls for an end to tax breaks and new protections ensuring infrastructure costs aren’t shifted to residential customers.
But the fundamental problem, the progressive policy group contends, is a mismatch between energy supply and demand. To ease that strain, Innovation Ohio urges lawmakers to make data center developers build their own power instead of relying on the public grid. “Some of the richest companies in the world are using Ohio’s electric grid like an unlimited power outlet while taxpayers pick up the tab,” Innovation Ohio President Michael McGovern said. “We are literally paying companies to plug massive electricity demands into our grid, then asking families to cover the cost. That’s a bad deal for Ohio taxpayers.”The most straightforward critique in the Innovation Ohio report — and among state lawmakers — is Ohio’s data center sales tax exemption.When it was initially passed, data centers were part of the still-nascent shift to cloud computing; now they’re a critical component in the use and training of large language models. Innovation Ohio tracks the exemption in state tax reports. For the first five fiscal years it was on the books, the exemption was estimated to cost less than a million dollars a year.“By making data centers cheaper to build,” the report states, “Ohio is encouraging more facilities to connect to an already-strained grid.”As part of the most recent budget, they voted to eliminate the incentive, but Gov. Mike DeWine vetoed it. Ohio House and Ohio Senate leaders have teased an attempt at overriding that veto, and there are other standalone bills which would nix the tax break.The utilities handling that work operate as regulated monopolies, so, their expenses eventually show up on your monthly utility bill. “In short,” the report states, “rapid data center expansion is resulting in higher electricity costs for Ohio households and businesses.” Innovation Ohio points to laws in Georgia which prevent cost-shifting by requiring in statute that data centers pay for their infrastructure costs. The report also praises AEP’s new data center tariff. Those billing standards require data centers pay for at least 85% of the power they reserve, whether they use it or not.Innovation Ohio compares the grid to a highway. The 85% rule is like requiring data centers to build the extra lanes they need, but the state’s tax breaks are filling up those new lanes as fast as their built. “More cars on the highway mean traffic for everyone,” the report states, “regardless of who paid for the extra lanes.”And that drives at the report’s central argument: Data centers are creating too much demand. The regional grid operator PJM Interconnection runs a capacity market which effectively puts a price on reliability.In a recent auction, capacity prices saw a nearly ten-fold increase in a single year. They’ve risen since and would’ve gone up more if not for a price cap imposed following a lawsuit filed by Pennsylvania.The answer, the group claims, is behind-the-meter power generation. That allows facilities to build power plants on-site rather than simply connecting to the grid. But if H.B 15 opened the door, Innovation Ohio thinks lawmakers should be pushing developers over the threshold.“This approach puts the burden on data centers to solve their own power problem rather than passing it to the public grid,” the report states.That measure prohibits many local officials from signing nondisclosure agreements—a tool some developers have used to avoid public scrutiny.For instance, it has nothing to say about developers claiming basic information like water or power use is proprietary information and not subject to public disclosure. Innovation Ohio contends that devoting six months to studying a problem that’s already here suggests the effort “may be more about buying time than producing meaningful solutions.”Photos: Clevelanders Streaked Around Huntington Bank Field at the 2026 Cupid’s Undie Run
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