Ohio has emerged as a leading state for data center development, which has attracted billions of dollars in economic growth and provided a blueprint for other states to attract investment, according to a new report from The Buckeye Institute in partnership with National Taxpayers Union released Wednesday.
The report, written by Aswin Prabhakar, Economic Research Analyst at The Buckeye Institute, highlights four policies Ohio got right:
Imposed shot clocks that require regulators to make decisions within defined time frames.
Legalized and clarified behind-the-meter power that gave data center owners certainty to build their own on-site generation rather than waiting years for utility connections.
Encouraged development on brownfields, which are in former industrial sites that have existing roads, utility infrastructure, and industrial zoning, to protect farmland and neighborhoods.
Published transmission capacity maps so builders could identify viable locations before spending money.
Overall, Ohio removed barriers to growth, which has put it toward the top in the nation for data center development. Now other states should look to Ohio as a blueprint for reducing energy rates and reforming permitting for energy demand.
However, the Ohio legislature is considering a set of policies that could effectively act as a statewide moratorium on data centers and nearly 20 Ohio municipalities have enacted or are considering moratoriums on data center construction. Retreating from data center growth now would be a mistake, said Pete Sepp, President of National Taxpayers Union.
“Taxpayers can benefit from data centers through reduced property taxes, increased electric supply, and new investment in their communities,” Sepp said. “The question is will elected officials move forward thoughtfully and leverage this technology revolution with the right policies for their constituents?”
The report urges policy makers to focus on removing barriers to new energy infrastructure, improving regulatory certainty, and ensuring utility policies do not discourage investment.
“The backlash is understandable but misdirected. Data centers did not create Ohio’s energy supply problem—they exposed it. In fact, aware of their sector’s disruptive energy demands, some of the industry’s largest players have signaled their intent to pay their own way,” according to the report.
Anthropic committed $50 billion to building custom data centers with private capital, and Meta has pledged more than $600 billion in infrastructure investment over three years. Legislative reforms are unwinding Ohio’s earlier mistakes, but course correction takes time and market participants still suffer consequences.
“When data center investment arrived and electricity demand surged, Ohio’s grid lacked sufficient capacity. Predictably, electricity prices spiked, capacity auctions tightened, and data centers took the political blame for a supply shortfall years in the making,” according to the report.
“Legislators and regulators in Ohio can protect ratepayers and taxpayers while ensuring the state's economy enjoys a prosperous future from the next phase of the Information Age,” Sepp concluded. “NTU is proud to partner with The Buckeye Institute to show how it can happen.”
National Taxpayers Union is the only free-market organization for taxpayers that unites effective advocacy with useful research about how to limit taxes, spending, and regulation at every level and branch of government—state, federal, administrative, and judicial.
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