State lawmakers said they are early in negotiations on an omnibus bill overhauling Ohio’s energy policies, and while details are scant, the ever-growing number of data centers statewide are part of the equation.
House Speaker Matt Huffman (R-Lima) said last Tuesday his caucus is focusing in on what might bolster the generation of new energy, with customer demand peaking in parts of the state.
“We can’t bring these folks here if we don’t have, in my estimation, a new way of producing and distributing power,” Huffman said. “The data centers are a part of that.”
Huffman isn’t prioritizing policies that further regulate data centers or other energy-intensive customers, he said. Gov. Mike DeWine said he believes the Public Utilities Commission of Ohio should be the one determining how that’s done.
“There is always the question, who pays, and the goal, of course, is always to be as fair as you can,” DeWine said.
The PUCO is considering levying a tariff on the facilities—making them commit to paying 90% per month of the energy they say they’ll use, even if they use less, as proposed by American Electric Power (AEP).
Sales tax break
A bipartisan group of lawmakers and lobbyists have said they believe it’s time to rein in the incentives the state offers to tech firms building in Ohio.
“We’re shoveling a lot of money into these guys that are ultimately going to significantly increase electricity costs for everybody. Where’s the value add for Ohio on this?” Sen. Bill Blessing (R-Colerain Township) said in an interview.
Blessing plans to reintroduce a provision to eliminate the sales tax exemption for data centers, he said.
Research released last Tuesday from left-leaning public policy firm Policy Matters Ohio showed that if the exemption benefited the project investments pledged by Amazon, Google, and Microsoft in the last two years alone, the state and its local communities will miss out on close to $1.6 billion in revenue.
“I question whether that’s an appropriate use of state resources,” Policy Matters Ohio Research Director Zach Schiller said in an interview.
Blessing said he thinks some of his colleagues won’t back the proposal for fear of antagonizing the tech industry and the DeWine-Husted administration, which has ardently backed these project proposals thus far. But parts of Blessing’s own party may back a break elimination, for different reasons.
The Buckeye Institute, a right-leaning researcher, is on board.
“We would rather, instead of giving out specific tax breaks, see lower tax rates that benefit everybody across the spectrum so small entrepreneurs can benefit as well as bigger companies,” said Rea Hederman, the Buckeye Institute’s policy vice president.
Hederman said the state budget will be tighter this two-year cycle so lawmakers might be more likely to look at axing tax exemptions.
