Ohio advocate pushes FERC to act on three-year-old AEP transmission complaint as data center queue strains PJM
A stalled local transmission dispute at FERC exposes how PJM's cost allocation rules lag behind data center-driven grid expansion.
Ohio's ratepayer advocate has asked the Federal Energy Regulatory Commission to resolve a local transmission complaint against American Electric Power that has sat unresolved for three years, warning that stalled proceedings leave PJM consumers exposed to rising data center-related grid costs. The complaint, filed in 2023, challenges how AEP allocated costs for local transmission upgrades in the PJM footprint, a dispute that predates but now overlaps with the wave of data center interconnection requests hitting the Midwest grid.5
The timing matters. FERC in June ordered all six regional grid operators under its jurisdiction to justify or rewrite their large-load tariffs, responding to the surge of data center and AI-driven demand inquiries that PJM and other RTOs are processing. That show-cause order, issued unanimously under Section 206 of the Federal Power Act, puts cost allocation questions at the center of the commission's agenda, but the Ohio case shows how older disputes can languish while new policy frameworks take shape.3
Ohio Consumers' Counsel Maureen Willis filed the request on Tuesday (2026-09-01), arguing the three-year delay undermines ratepayer protection. The underlying dispute centers on whether AEP's local transmission projects should be treated as regional facilities, which would spread costs across the PJM footprint, or as local upgrades paid by the customers who benefit directly.5
That distinction is no small matter for PJM ratepayers now that data centers are driving transmission investment decisions. Five state ratepayer advocates told FERC in July that the commission's emerging framework for data center grid connections fails to adequately shield other consumers from data-center-driven transmission costs. Their concern: if new large-load customers can trigger local transmission upgrades, the cost allocation rules determine whether existing ratepayers absorb part of that bill.5
The Ohio dispute intersects with a broader fight over competitive bidding for transmission projects tied to data centers. Nine Midwest utilities petitioned FERC in April to suspend competitive bidding for five years on transmission projects linked to large loads, arguing urgency demanded a streamlined process. Google, Microsoft, Meta and other tech companies pushed back in June, saying the suspension would restrict competition exactly when grid investment decisions are becoming most consequential.2
American Transmission Co. filed a separate complaint in late June claiming the Midcontinent Independent System Operator botched the competitive solicitation for a $350 million power line and four substations in Wisconsin. That case and the Ohio one share a common thread: both challenge whether the existing competitive solicitation and cost allocation frameworks can handle the scale of investment now being proposed.4
FERC's June show-cause orders represent the commission's most direct attempt to reset those rules across all six RTOs and ISOs. But the orders give each grid operator a choice: justify existing large-load tariffs or propose rewrites. That process will take months, leaving the Ohio complaint and similar disputes in limbo while the broader policy question works through the regulatory machinery.3
AEP's position in the Ohio case mirrors arguments utilities have made elsewhere. The company says its transmission investments comply with PJM's tariff and that the cost allocation treatment follows existing rules. The ratepayer advocate counters that the rules themselves are outdated, designed for an era before data centers could double or triple load on individual substations within a few years.5
The parallels to New England's asset condition disputes are instructive. There, the New England States Committee on Electricity told FERC in June that Eversource's $360.6 million X-178 project "epitomizes" a flawed review process, noting that since 2016 some $6.5 billion in asset condition projects have been installed, representing 55% of all transmission projects in the region. Another $5.5 billion of similar projects are planned, proposed or under construction versus just $281 million in regional projects. Eversource rejects the allegations, saying the project has been "extensively reviewed" and that complainants identify no evidence of scope or design being influenced by compensation incentives.1
What the Ohio advocate is essentially asking FERC to do is decide a test case before the procedural backlog buries it. If the commission finds AEP misallocated local upgrade costs, it would signal to every utility in PJM that data center interconnection deals cannot be structured to push costs onto the broader rate base. If it upholds AEP, the message is that the existing tariff governs until the show-cause process produces new rules.5
The unresolved risk for traders and analysts watching PJM congestion and transmission pricing is the duration of the gap between FERC's June policy push and its application to individual disputes. The Ohio complaint has already waited three years. Every month the show-cause process runs without resolution is another month data center interconnection agreements get signed under the old cost allocation assumptions, potentially embedding cost shifts that will be difficult to unwind. FERC has not set a timeline for ruling on the Ohio complaint, and the commission's agenda is increasingly crowded with large-load tariff proceedings that its own June order generated.3