Amazon.com Inc. plans to add up to 12 more data centers to the three it started running a year ago in Central Ohio, adding jobs and investment – but it wants a discount on its electric bill first.
The e-commerce giant's Vadata Inc. affiliate said in a regulatory filing it would build up to four more centers each on its sites in Dublin, Hilliard and New Albany.
“In just three years, the combined direct, indirect and induced effects of (Amazon’s) investment could create thousands of new jobs in Ohio and hundreds of millions of dollars in new regional income and GDP in Ohio,” says the joint filing from Amazon affiliate Vadata Inc. and American Electric Power Company Inc.
“There is even greater long-term potential for additional data center development beyond these three campuses as enterprises migrate more and more of their IT resources to the cloud,” it says.
Data centers usually run on spare staff, but the development would add at least 25 jobs, the minimum required when seeking an economic development arrangement from the Public Utilities Commission of Ohio.
Any job, wage, electric usage or other numbers specific to the project are blacked out from documents as trade secrets. Amazon has previously said it would invest $1.1 billion in a Central Ohio data center network. The company landed $24 million in state and local incentives for the data centers and distribution warehouses.
PUCO conducts a hearing Tuesday on the request for a tiered discount on electricity usage as the data center network expands, plus other fee reductions. Economic development officials from the three suburbs signed a letter supporting the deal.
Vadata's application says only that the discount would be "modest." From the character widths of blacked out figures, it appears that the discount on the kilowatt hour usage rate rises from single to double digits once the fifth data center is online.
The Office of the Ohio Consumers' Counsel, the agency representing residential rate-payers, and the Ohio Manufacturers' Association filed public comments arguing the secretive discount will inevitably lead to other customers making up for AEP's lost revenue.
AEP (NYSE:AEP) would benefit from the expansion of a customer like Amazon (Nasdaq:AMZN), their joint filing says. It's a large, steady user of power with consistent consumption 24 hours – no peaks and valleys at different times of days. In the aggregate, the application says, cloud computing in specialty facilities is more energy-efficient than numerous clients' on-site servers.
AEP Ohio's residential customers currently pay a 75 cent monthly surcharge to make up for other economic development deals, adding up to about $12 million yearly. Amazon emphasizes its discount would not be added to that line item.
The Consumers' Counsel isn't buying the feint: “Nonetheless, it can be expected that AEP will seek to collect from other customers, through charges on customers’ electric bills, the revenues AEP would forgo as a result of the discounts proposed in the application,” the agency filing says.
The unknown billing borne by other customers is "not limited or capped,” said the manufacturing trade group's filing. “Moreover, the joint application is void of any specific commitments by Vadata regarding capital investment and employment levels that may provide public interest benefits.”