To enact sections 4934.01, 4934.02, 4934.03, 4934.04, 4934.05, 4934.06, 4934.07, 4934.08, 4934.09, 4934.10, 4934.11, and 4934.12 of the Revised Code to impose certain minimum requirements on data center customers in the state.
HB706 establishes a new set of statutory requirements for large data center customers of electric distribution utilities in Ohio. The bill defines a data center as a centralized electronic information facility with an aggregate monthly maximum demand above 25,000 kilowatts, and it applies to customers or affiliated groups that own or operate such facilities. It requires these customers to enter into binding agreements with utilities that include minimum demand commitments, long-term service terms, exit fees or liquidated damages, and financial assurances such as collateral, guarantees, or letters of credit.
The bill also directs the Public Utilities Commission of Ohio (PUCO) to approve these agreements and to ensure that utility cost recovery does not shift data-center-related costs onto other customer classes unless it is just and reasonable. It sets a floor for full-capacity data centers of at least 85% of contracted capacity, a minimum contract term of 12 years, and requires financial assurance to cover unrecovered facility costs and risks if a data center exits, downsizes, or defaults. The bill further requires that any exit fees, collateral forfeitures, or unused-capacity payments be credited to retail customers rather than retained by the utility, and it instructs PUCO to adopt statewide standards for load-study deposits, queue forfeitures, and related interconnection or service-queue rules.
In practical terms, the bill would add a new chapter to the Revised Code governing how utilities serve large data centers and how associated infrastructure costs are allocated. It would limit utilities from making investments or providing service to noncompliant data center customers, while preserving PUCO authority to impose even stricter requirements. It also exempts certain PUCO rules adopted under the bill from the state’s regulatory restriction review provisions, signaling a preference for faster or more flexible utility regulation in this area.
The general sentiment reflected by the bill’s sponsorship and cosponsorship is supportive of imposing stronger protections for ratepayers and utilities as data center load grows in the state. Because the bill is only at the introduced stage and there are no committee transcripts or votes available, there is no recorded formal debate or vote-based sentiment to measure. The structure of the bill suggests a policy focus on reliability, cost recovery, and preventing stranded costs from being shifted to existing customers.
The main point of contention likely concerns how much financial risk should be placed on data center operators versus other utility customers. Data center developers and large-load customers may view the minimum contract terms, collateral requirements, exit fees, and mandatory billing demand as burdensome or potentially discouraging investment, while consumer advocates and regulators may support them as necessary safeguards against rate increases and stranded infrastructure costs. Another likely issue is the breadth of PUCO’s authority to impose stricter requirements and the bill’s removal of certain regulatory restrictions for rules adopted under its new standards.
HB706 would create a new chapter in the Revised Code governing large data center customers and their relationship with electric distribution utilities. It would require PUCO-approved service agreements, minimum billing demand commitments, financial assurances, and cost-allocation protections designed to prevent other customer classes from subsidizing data center-related infrastructure and service costs. The bill would also require statewide standards for queue and deposit practices and would preserve PUCO’s ability to impose stricter requirements, while directing that certain revenues collected from data centers be returned to retail customers rather than retained by utilities.
The available record shows the bill was introduced and referred to the House Energy Committee, but there are no committee transcripts or votes to indicate formal debate or opposition. Based on the bill’s text and sponsorship, the measure appears to have a generally pro-regulation, ratepayer-protection orientation, with support for ensuring that large data center loads pay their own way and do not shift costs to existing customers. No recorded vote history is available to show broader legislative sentiment.
The likely contention centers on cost responsibility and investment risk. Supporters would emphasize protecting residential and other utility customers from stranded asset costs, rate increases, and reliability impacts caused by large data center loads. Opponents or affected industry stakeholders may argue that the bill’s long minimum terms, 85% billing-demand floor, collateral requirements, exit fees, and PUCO approval requirements could make Ohio less attractive for data center development or create uncertainty in project financing. The bill’s broad grant of authority to PUCO to impose even stricter requirements, along with the exemption from certain regulatory restriction review provisions, may also be a point of concern for regulated entities.