Impose Certain Minimum Requirements on Data Center Customers

Before

The Ohio House of Representatives Energy Committee

Testimony Regarding HB 706

Protecting Consumers as Ohio Meets Growing Data Center Demand

Maureen Willis, Agency Director

Office of the Ohio Consumers' Counsel

On Behalf of

Office of the Ohio Consumers' Counsel

June 3, 2026

Chairman Holmes, Vice Chair Matthews, Ranking Member Rader, and members of the House Energy Committee, thank you for the opportunity to provide interested party testimony on House Bill 706, Substitute Bill Version 3.

My name is Maureen Willis, and I serve as the Director of the Ohio Consumers' Counsel (OCC), the state agency charged by the General Assembly with representing the interests of residential utility consumers. OCC advocates for 4.5 million households on matters affecting the affordability, reliability, and transparency of utility service. This year marks OCC's 50^th year of service to Ohio consumers.

At the outset, I want to be clear: Ohio can welcome data center investment without shifting costs to families. Those goals are not in conflict. In fact, responsible growth depends upon getting this balance right.

Ohio is experiencing extraordinary electric load growth driven largely by data centers. That growth brings opportunities for jobs, tax revenue, and economic activity. But it also raises an important question for policymakers and regulators: Who pays when extraordinary new demand requires substantial system investment?

For residential consumers already facing affordability challenges, the answer must be straightforward: costs should follow cost causation.

Residential consumers across Ohio are already struggling with rising utility costs. Many households are making difficult choices between paying for electricity, groceries, medications, and housing. Policies that shift the costs of concentrated or speculative electric demand onto captive residential consumers are neither fair nor sustainable.

HB 706 takes important and necessary steps to address this concern. The bill recognizes a basic principle of utility regulation: when exceptionally large electric loads require significant new investment in generation, transmission, or distribution infrastructure, the customers driving those costs should bear responsibility for them.

Ohio consumers have seen the consequences of stranded utility costs before. If utilities build facilities, substations, or other infrastructure to serve exceptionally large customers and those customers later reduce demand, delay projects, or leave the system, remaining consumers should not be left holding the bill.

HB 706 appropriately establishes minimum standards for data center arrangements using the PUCO's existing data center tariff framework. The bill reflects several important principles that balance economic growth with consumer protection, including:

• Long-term customer commitments;
• Financial assurances associated with extraordinary infrastructure investment;
• Stranded cost protections;
• Clearer cost allocation; and,
• Safeguards against cost shifting to other consumers.

The protections create greater certainty for utilities and data centers while helping protect households and small businesses from major cost exposure they did not create and cannot reasonably absorb.

Some have raised concerns that a tariff structure specifically addressing data centers constitutes unlawful discrimination. OCC respectfully disagrees.

Data centers are not similarly situated to traditional industrial customers. They can involve unprecedented electric demand, substantial water usage, dedicated substations, significant transmission upgrades, and large-scale infrastructure investment. Data centers typically run at near maximum capacity all day every day, giving them a load profile that differs from most other large load customers. As data center demand increasingly reaches hundreds- or potentially thousands- of megawatts, Ohio faces regulatory questions of extraordinary scale. Recognizing those unique characteristics through tailored tariff treatment is not discrimination; it is sound regulation based on cost and system impacts.

HB 706 also appropriately recognizes the essential role of the Public Utilities Commission of Ohio. The PUCO must retain the authority to determine whether proposed arrangements are just, reasonable, and in the public interest. Transparency, accountability, and rigorous review are especially important when utilities seek specialized arrangements involving customers whose electric demand can rival that of entire cities.

At the same time, OCC respectfully offers several recommendations to strengthen the legislation.

Grandfathering

First, OCC supports a narrow clarification to the bill's grandfathering provision to ensure HB 706 fully achieves its intended consumer protections while recognizing existing contractual arrangements.

As currently drafted, the grandfathering language may be interpreted too broadly and could unintentionally exempt existing data center customers from important consumer protections contained elsewhere in the bill. Such an outcome would undermine one of the bill's central objectives: protecting existing consumers from bearing costs created by extraordinary new electric demand.

A targeted fix is available.

The only provision that should be grandfathered is Revised Code Section 4934.08, which addresses construction arrangements and reflects terms likely already negotiated in existing agreements between electric distribution utilities and data center customers. Preserving those construction-related commitments appropriately recognizes reliance interests associated with previously executed agreements.

At the same time, all other protections established in HB 706 should apply to all data center customers, including existing facilities. Those protections -including safeguards against cross-subsidization, cost recovery based on cost causation, and requirements governing exit fees, collateral forfeitures, or unused capacity payments -- remain essential to protecting Ohio consumers.

Bring Your Own New Generation

Second, OCC recommends consideration of a meaningful Bring Your Own New Generation ("BYONG") or credible supply planning framework for extraordinary new data center demand.

This does not necessarily mean data centers must operate independently of the grid. Rather, data center customers should demonstrate a credible plan for how extraordinary incremental demand will be served without undermining affordability or reliability for existing consumers.

Such planning could include long-term power purchase agreements, dedicated generation; storage investments; firm supply commitments; and meaningful demand flexibility.

The central question should remain simple: Does the proposal meaningfully reduce reliability and cost risks for existing consumers?

Growth works best when it is sustainable. Ohio should absolutely compete for investment, innovation and jobs. But economic growth is strongest when it is built on fair rules, responsible planning, and consumer protections that prevent households from bearing risks they did not create.

For these reasons, OCC supports House Bill 706 and respectfully encourages continued refinement to ensure strong consumer protections remain central to Ohio's energy future.

Thank you for the opportunity to testify. I would be happy to answer any questions.