Duke Wants Special Data Center Rules. Key Costs Would Be Negotiated Privately.

Key Points

• Duke Energy Ohio’s proposed data center tariff, Rate DC, sets minimum bills ranging from 60% to 85% of reserved capacity, negotiated on a contract-by-contract basis.
• AEP Ohio’s approved data center tariff sets a formula that locks in an 85% minimum bill for every customer above about 117 megawatts.
• Duke Energy Ohio’s own filing describes early termination two ways: its summary promises a seventh-year exit with 36 months of charges, while the proposed tariff sheet leaves exit terms to each contract.
• Public comments on Duke’s data center tariff, PUCO Case 26-0755-EL-ATA, are due Oct. 22, three days after Cincinnati’s in-person zoning meeting.

Article Summary

Duke Energy Ohio filed a proposed data center tariff, Rate DC, with the Public Utilities Commission of Ohio on July 27, 2026, in Case 26-0755-EL-ATA. Unlike AEP Ohio’s approved tariff, Rate DC leaves minimum bills (60% to 85%), collateral (0% to 100%), and early termination charges to individual contracts. Like AEP’s, it exempts contracts signed before it takes effect. Public comments are due Oct. 22, 2026.

AEP’s rules push large data centers to an 85% minimum bill.

Duke’s Cincinnati-area proposal allows as little as 60%, with collateral and exit terms negotiated project by project.

Duke filed the data center tariff, called Rate DC, with the Public Utilities Commission of Ohio on July 27. Regulators set an Oct. 22 deadline for public comments in Case 26-0755-EL-ATA. That lands in the same month Cincinnati holds its first public meetings on data center zoning, the follow-up to council’s zoning pause in February. City Hall decides where these buildings can go. The Duke filing addresses something Cincinnati can’t: who pays for the grid built to serve these facilities, and who carries the risk if a project never shows up.

Duke serves about 765,000 electric customers in Ohio, according to an Aug. 13 Duke release. Those are the customers the new rate class aims to protect. The 27-page application says Duke “shares the Commission’s goal to protect customers from bearing costs incurred to directly serve new data center load.” Read past that line, though, and the protections turn into ranges. Duke sets the actual numbers one deal at a time.

What Duke’s Data Center Tariff Would Require

Rate DC covers any data center with at least 25 megawatts of demand. It also covers smaller sites that need $10 million or more in Duke transmission or distribution work. The definition explicitly includes cryptocurrency mining. For scale, a 25-megawatt facility running flat out all year would use about as much electricity as 21,600 average Ohio homes. That’s a Cincinnati Exchange calculation based on 2024 EIA residential data showing 846 kilowatt-hours a month per Ohio household. Real data centers rarely run at full load every hour, so treat that as a ceiling.

Here’s what the proposed tariff sheet itself locks in. Contracts run at least 10 years and no more than 20. Each data center pays 100% of the “non-network” transmission built to serve it, meaning the lines and equipment that exist only for that customer. Every Rate DC customer must buy its electricity from a competitive supplier rather than Duke’s standard offer, the default supply many households buy. Customers must also cut back to an agreed essential load, or switch to backup generation, when Duke declares a grid emergency.

Everything else lives in an Electric Service Agreement that Duke negotiates privately and then submits to regulators. The minimum bill, the share of reserved capacity a data center pays for whether it uses it or not, can land anywhere from 60% to 85%. Collateral can range from zero to 100% “of cost required as credit support,” tiered by the customer’s credit rating. The contract also decides early termination charges.

Duke’s application states the change “will not result in an increase in any rate.”

Duke and AEP Ohio’s Data Center Tariff, Side by Side

The Public Utilities Commission approved AEP Ohio’s tariff in July 2025, after AEP Ohio paused new data center development in its territory. That decision remains on appeal at the Ohio Supreme Court, according to a Consumers’ Counsel filing. Duke’s own filing says Rate DC “uses the general framework” of the AEP data center tariff case, “but with necessary and reasonable modifications.” The table shows where those modifications land.

Provision	AEP Ohio (in effect since July 23, 2025)	Duke Energy Ohio Rate DC (proposed)
Who qualifies	New data centers of 25 MW or more	25 MW or more, or $10 million or more in Duke grid work
Minimum bill	Sliding formula from 60% at 25 MW, capped at 85%	60% to 85%, set in each contract
Contract length	Ramp of up to four years, plus eight years	10 to 20 years
Collateral	50% of all minimum charges for the full term, unless the customer or a co-signing financial sponsor holds A-/A3 credit and cash of 10 times the requirement	0% to 100%, tiered by credit rating, set in each contract
Project canceled before power-on	Customer repays 100% of buildout costs, excluding regional transmission, if it cancels or delays more than 12 months	Duke bills the contract minimum for the full term if the customer never energizes, “unless otherwise mutually agreed”
Early exit	After year five past the ramp, with a fee equal to 36 months of minimum charges	Set in each contract, based on present value of remaining revenue requirements
Notice to leave after the term	Three years	12 months
Contracts signed before the tariff	Grandfathered unless expanded by more than 25 MW; 12,219 MW signed before the tariff took effect	Exempt as “Existing Load” unless expanded by 25 MW or more

Sources: PUCO Opinion and Order of July 9, 2025, and the Oct. 23, 2024 stipulation it adopted, Case 24-508-EL-ATA; AEP Ohio’s Feb. 12, 2026 letter to the PUCO; Duke Energy Ohio application, Case 26-0755-EL-ATA, Exhibits B and C-2.

The minimum bill matters most, because it decides who eats the cost of unused capacity. AEP’s formula starts near 60% for a 25-megawatt customer and climbs with size. A Cincinnati Exchange calculation from the published formula shows every AEP customer above roughly 117 megawatts hits the 85% cap. Take a fully ramped 300-megawatt campus. Under AEP’s rules, it pays for at least 255 megawatts every month. Under Rate DC, Duke could sign the same customer at a 180-megawatt floor. Duke could also sign it at 255. The tariff allows both, and the public learns which one only when the contract reaches regulators.

The Summary and the Tariff Sheet Say Different Things

Duke’s own plain-English summary, Exhibit C-2, describes stricter exit terms than AEP’s. It lists “termination provisions allowing the Data Center to exit after the seventh year following the load ramp period, subject to payment of an exit fee equaling minimum charges for 36 months.” That’s two years longer than AEP’s lock-in.

That seventh-year language doesn’t appear anywhere in Exhibit B, the proposed tariff sheet regulators would actually approve. The tariff sheet instead leaves early termination to each contract, with charges “based on the present value of the revenue requirements over the remaining term.” That formula could cost a departing customer more than 36 months of bills, or less. The point is that the binding document and the summary describe different mechanisms. Nothing in the filing reconciles the two.

At least one party already reads the filing the summary’s way. The Ohio Manufacturers’ Association Energy Group’s Aug. 3 motion to intervene says Rate DC would impose “an exit fee equal to minimum charges for 36 months,” and cites Exhibit B for it. Constellation, a power supplier, flagged a second conflict in its Aug. 12 motion. The tariff sheet says Rate DC service “shall constitute the Company’s Standard Service Offer,” then bars data centers from the standard offer other customers use. Constellation called it “contradictory language that must be addressed.”

The Cincinnati Exchange sent Duke Energy Ohio questions about both conflicts, its existing data center contracts and whether future agreements will become public. The company had not responded by publication, and we’ll update this story when it does.

Contracts Duke Signs Before Approval Stay Outside Rate DC

Rate DC applies only to “New Load,” meaning data center load without a signed service agreement before the tariff takes effect. Anything signed earlier counts as “Existing Load” and stays on its current terms unless the customer expands by 25 megawatts or more. AEP’s tariff carved out earlier contracts the same way, and regulators counted it among that tariff’s “reasonable concessions” to the industry. The exemption itself isn’t unusual. The application says Duke has already “included customer protections in contracts with data centers.” Those contracts aren’t in the docket, so nobody outside Duke can compare them with Rate DC.

The calendar keeps that window open for a while. Reply comments and motions to intervene run through Nov. 12, and the docket shows no decision date. Four parties have moved to intervene. The Ohio Consumers’ Counsel says it speaks for about 700,000 residential Duke customers, and its motion argues “consumers should not be required to subsidize data centers’ enormous energy demand.” The motion doesn’t take a position on Rate DC’s specific terms. The Ohio Energy Group’s members include GE Aerospace, Ford and Cleveland-Cliffs, which buy large amounts of Duke power. The manufacturers’ group and Constellation round out the list.

AEP territory shows how much load a carve-out can cover. In a Feb. 12 letter to regulators, AEP Ohio reported 17,861 megawatts of data center load under signed agreements. Developers signed 12,219 megawatts of that total before the tariff took effect. That pre-tariff block alone exceeds AEP Ohio’s entire historical peak, which the company puts at roughly 8,000 to 10,500 megawatts.

The tariff’s own filter tells a different story. Developers had requested more than 30,000 megawatts before regulators approved the tariff. Once the tariff demanded study fees, only 13,022.7 megawatts paid for studies. Once it demanded binding contracts and collateral, 5,642 megawatts signed. By that measure, about 19% of the requested load survived. Asking for electricity is easy. Signing for the grid built to deliver it is a different decision.

Who Pays for What When a Data Center Plugs In

“Data centers should pay their own way” sounds like one rule. In practice, it covers at least five separate bills, and Rate DC handles each one differently.

Customer-specific transmission. The data center pays 100% under Rate DC.

Network transmission. These upgrades belong to the shared regional grid. Rate DC sends those costs through “FERC guidelines,” and the customer pays directly only “when customer does not fulfill ESA commitments.” Otherwise, federal and regional rules decide the split.

Local distribution lines. Duke’s existing line extension policy, Rider X, governs these, again with a backstop if the customer breaks its contract.

Generation. Rate DC customers must buy from competitive suppliers. If a supplier fails, Duke plans a separate standard-offer purchase for data centers and says it’s “preparing another application” to set those terms. State regulators ordered a similar wall for AEP on Aug. 5. In a PUCO bulletin, Chair Jenifer French said regulators “continue to implement safeguards to ensure that other customers are not impacted by costs to serve large loads like data centers.”

Stranded infrastructure. Utilities sometimes build substations and lines for a project that shrinks, stalls or never arrives. The cost of that equipment doesn’t disappear with the project. Minimum bills, collateral and exit fees exist to put that risk back on the customer who requested the capacity. Under Rate DC, Duke and each customer negotiate all three.

One piece of Rate DC cuts clearly in households’ favor. The tariff says Rate DC customers “will be treated for cost allocation and ratemaking as coincident with Company peaks,” which allocates costs as though their demand peaks when Duke’s system does.

Developers can also absorb big grid costs directly. In a March 2026 release, AEP Ohio said SB Energy committed to pay $4.2 billion for new 765-kilovolt transmission serving a planned 10-gigawatt campus in Piketon. That covers transmission. It doesn’t cover every generation, capacity or market cost the campus could create.

The Second Bill Runs Through Ohio’s Tax Code

Electric rates are one channel. Ohio’s sales tax exemption is the other. Under Ohio Revised Code 122.175, the state Tax Credit Authority can exempt up to 100% of sales and use tax on qualifying data center equipment. Qualifying projects must invest at least $100 million over three consecutive calendar years and meet a $1.5 million annual payroll at the site.

The equipment definition reaches well past servers. It includes cooling systems and building materials. It also covers property used “to generate, transform, transmit, distribute, or manage electricity” needed to run the data center. So the electrical gear at the center of the grid-cost debate can also qualify for the tax break.

Gov. Mike DeWine paused new applications on May 27 while a legislative committee studies data center growth. Councilmember Meeka Owens flagged the exemption’s cost to City Council in a June 1 letter, citing state figures on exempted revenue. Council’s budget committee received and filed the letter June 8.

The Case for Letting Duke Negotiate

Duke’s filing makes the best argument for its own approach. It warns that “a rigid one-size-fits-all approach to serving Data Centers could discourage their development” in its territory. It also distinguishes loads needing “little to no transmission investment” from ones needing a lot. A small facility plugging into spare capacity poses a different risk than a campus that needs new lines. By Duke’s logic, a uniform high floor could steer that first project somewhere else.

That argument has support outside Duke. The Ohio Manufacturers’ Association called AEP’s tariff discriminatory, though the commission rejected that argument. And every Rate DC contract still goes to the commission for approval, so regulators see each deal before it takes effect.

That flexibility comes with a tradeoff. AEP customers can read the minimum-billing formula in the tariff today. Under Duke’s proposal, Duke and each developer would set the equivalent number in their individual agreement.

What Cincinnati Can and Can’t Decide

City planners set review criteria in February for any data center permit filed during the zoning pause. One asks for “electrical grid impact studies and demonstration of available electrical capacity to serve the proposed use without adverse impacts to existing customers.” The staff report never mentions Duke. The city can ask for a grid study. It can’t set the price of the grid.

The two data center cases listed on the city’s project page sit far below Rate DC’s reach. In April, staff recommended approving fire system permits tied to a 5,000-square-foot DartPoints expansion at 302 W. Third St. downtown. In September, staff backed generator and electrical upgrades at a Verizon network facility at 1200 W. Eighth St. in Queensgate. City staff put that site’s capacity at 664 kilowatts. Rate DC’s 25-megawatt threshold is about 38 times larger.

Duke customers also face a separate case. In Case 26-0132-EL-AIR, Duke asked to raise distribution rates, which the Ohio Consumers’ Counsel says would add about $8.32 a month to a typical residential bill starting in 2027. Nothing in that case ties the increase to data centers, and the two proceedings run on separate tracks.

The city’s zoning study holds its first public meetings online Oct. 1 and at the Walnut Hills Branch Library on Oct. 19. Comments on Duke’s data center tariff are due at the PUCO three days after that second meeting.

FAQs

What is Duke Energy Ohio's proposed data center tariff?

Rate DC is a new rate class Duke Energy Ohio proposed to state regulators on July 27, 2026, in Case 26-0755-EL-ATA. It covers data centers using 25 megawatts or more, or needing $10 million or more in Duke grid work. Customers would sign 10- to 20-year contracts and buy electricity from competitive suppliers.

How does Duke's data center tariff compare with AEP Ohio's?

AEP Ohio’s approved tariff includes a minimum-bill formula that reaches 85% of reserved capacity for customers above about 117 megawatts. Duke’s proposal allows 60% to 85%, set in each contract. Duke also leaves collateral and early termination charges to individual contracts, while AEP’s tariff spells them out.

Do existing Cincinnati-area data centers have to follow Rate DC?

No. Duke’s proposal exempts “Existing Load,” data center load under agreements signed before the tariff takes effect. It moves to Rate DC only if the customer expands by 25 megawatts or more. Duke says its existing data center contracts already contain customer protections, but those agreements are not included in the Rate DC docket reviewed by The Cincinnati Exchange.

Who pays for the power lines that serve a new data center in Duke territory?

Under Rate DC, the data center pays 100% of non-network transmission built specifically to serve it. Shared network transmission follows federal guidelines, and local distribution follows Duke’s line extension policy. The customer pays those costs directly only if it fails to meet its contract commitments, according to the proposed tariff.

How can Cincinnati residents weigh in on data centers?

The PUCO set an Oct. 22, 2026, deadline for comments on Duke’s data center tariff, with replies and intervention motions due Nov. 12. Separately, Cincinnati’s zoning study holds public meetings online on Oct. 1 and at the Walnut Hills Branch Library on Oct. 19.