Columbus residents may see higher costs for electric, water and gas by 2027.
Data centers are seen as the main cause and driver of utility costs for water and electric. If rate increases are approved, an average customer can expect to pay an extra $36 a month by 2027 if they use American Electric Power of Ohio, Columbia Gas of Ohio and Columbus Water.
Columbus resident Mark Krietemeyer was one of several people who spoke at a Public Utilities Commission of Ohio meeting this month against a proposed rate increase for AEP. He said his electric bill keeps getting more expensive.
Krietemeyer said he spent more than $660 in January, but said his bill would be more than $700 if the AEP rate increase is approved.
Krietemeyer, like dozens of others who spoke at the hearings, said he can’t keep up with rising costs anymore.
"I'm in a fully electrically heated home. I've done many things to try to keep up with the cost, insulation, roofing, windows, you know, all the stuff, light bulbs, so I've, you know, tried to keep up with all that," Krietemeyer said.
AEP has been increasing costs for the last several years as the region is hit with rapid population growth and more of the electric and water-hungry data centers are built.
Columbus resident Larry Brasher was one of several people at the PUCO hearings who brought up data centers and the strain the Manhattan-sized warehouses are putting on the grid and water resources.
“My concern is not just with the data centers or with the rate hikes. My concern is also the fact that here in Columbus, people are facing a housing crisis. People are also facing (problems with) other utilities such as our gas," Brasher said.
Columbia Gas is litigating a base rate increase in the Ohio Supreme Court that would increase costs from about $36.15 to $58.01 by 2027. A decision on whether this rate structure is in the public interest could come down next year.
This AEP rate increase on average would cost an extra $4 a month. The PUCO will hear expert testimony on the case starting next year.
Columbus Water customers should expect an even higher increase at an average of $10 extra per month.
Columbus Water and Power Deputy Director of Finance Jon Lee said some costs driving the water rate increase are outside the city’s control. The city hopes to build a new $2 billion water treatment plant to account for population growth and expects more industrial development from data centers.
“We've not seen rate increases like this probably for close to 20 years," Lee said.
Alongside the increase, Lee said Columbus recently changed its rate structure to charge more money if a commercial or industrial customer uses more water.
Before, the more these water guzzling superstructures consumed, the less they paid. Now, these users pay a uniform rate.
Lee said Columbus Water and Power is exploring a rate structure that increases costs with the amount of water that is used. Lee said this would offset costs to everyday customers from high capacity water users like data centers.
AEP and the PUCO did something similar, placing tariffs on data centers to offset some of the increasing costs the mammoth buildings contribute to.
Lee said the city isn’t ready to take that same step yet.
Columbus City Council member Christopher Wyche, the chair of the Public Utilities & Sustainability committee, said it would be more difficult for the water utility to target data centers in that way. Many of the data centers are built in suburban, rural or exurban areas served by Columbus Water. The utility typically has agreements with each municipality that can limit further regulation.
Wyche said other high capacity users like hospitals or Abbott Labs could be impacted if the city doesn’t find a way to target data centers specifically.
“Unless we carve out something very specific and tailored to data centers alone, they could get wrapped up in that same increase," Wyche said.
Wyche blames city decisions decades ago that didn't plan for growth for the rate increases now. He said investments like the water treatment plant are necessary, but the council did push back and negotiated a lower rate increase.
“It's really upon us to kind of use our platform to push on things that we see that are gonna be detrimental to affordability in the city of Columbus," Wyche said.
Ohio Consumer’s Counsel Maureen Willis said utility increases are being seen across the state and weigh on everyday people. Her agency advocates on behalf of utility consumers when rate increases are considered.
“We all believe that there is an affordability crisis. People are having problems paying their bill," Willis said.
Willis said data centers should be paying more if their operations cause utilities to hike prices. She believes it's hard to dispute that these structures are the main drivers of the increase in demand.
“We think you cause the cost, you pay for the cost," Willis said.
Willis said her office is working with PJM, the multi-state grid operator, to protect customers from data center-related price increases. She said data center companies like Meta, Amazon and Google are being pushed to generate their own electricity in what she equated to "bringing your own beer" to a party.
Willis said as the affordability crisis continues, more people will start showing up to what are typically very quiet public meetings to oppose new rate increases.
“With being unable to afford and seeing rates go up on electric gas and water, it's getting to a breaking point," Willis said.
Willis and Wyche said the city and the consumer's counsel office want to connect people to assistance programs for high utility costs. More information for statewide utility assistance programs can be found on the consumer's counsel website. The city of Columbus also provides utility bill assistance to some customers.
