Commercial, Regulation, Sourcing Renewables  -  January 11, 2018

Amazon data centers granted discount in Ohio

The Public Utilities Commission of Ohio has approved an economic development arrangement between Amazon subsidiary Vadata Inc. and AEP Ohio, including a 10-year discount for its data centers operating in AEP Ohio’s territory.

"This arrangement recognizes the unique electric load profile of data centers and could represent a new era of economic development in Ohio," PUCO Chairman Asim Z. Haque said in a Jan. 10 news release.

Vadata, Inc. is a subsidiary of Amazon Web Services, which is the cloud computing arm of Amazon.com Inc.

According to The Columbus Dispatch, key elements of the proposal include:

• Vadata Inc., the Amazon Web Services subsidiary that operates the data centers, would not have to pay the full cost of 12 special charges, or riders, that other businesses typically do. That leaves eight riders that the company would pay at normal levels.

• The company would pay base rates for electricity delivery and some of the special charges, but with a discount. The percentage discount — with figures not disclosed — would increase as Amazon builds more data centers in AEP territory.

• AWS also would have an undisclosed cap on the amount of its electricity use that would be subject to certain charges.

• The agreement would be in effect for 10 years.

While Haque noted that “consumer bills would not increase as a result of the Commission’s approval,” consumer advocates expect customer costs to rise indirectly.

The application approved by PUCO referenced community support for Vadata’s capital investment and job creation through these data centers, stating that Vadata "has committed to invest hundreds of millions of dollars over several years in Ohio to acquire and develop three properties" for cloud computing data centers,” located in Dublin Hilliard and New Albany.

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