Ohio Senate Energy Committee - 3-24-2026

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Senator Reinecke.

Senator Schaefer.

Senator Temkin.

I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

Thank you. Chairman Chavez, Vice Chair Landis, Ranking Member Smith, good morning.

Rarely accused of being quiet.

Yes. All right. Good morning. Thank you for having us here today. I am really excited to be here and talk about some of the great things that are happening within the energy space in the state of Ohio because of great leadership and collective efforts, your collective efforts, with the passage of House Bill 15. You should have my written testimony, but rather than reading that, I'd like to go through a presentation that I also provided just to highlight a few key topics. So House Bill 15 was, of course, sweeping legislation that created a lot of positive changes as it relates to the energy landscape in Ohio. It improved timelines with the Ohio Power Sighting Board and the PUCO and created accelerated review of certain generation cases. It also encouraged, of course, behind-the-meter generation. As I just mentioned, under House Bill 15, there are four different timeline tracks for cases that are filed at the Ohio Power Siting Board. These new timelines have expedited the review of generation projects that are important to the economic development goals of Ohio. By way of background, the Power Siting Board is responsible for siting electric generating plants over 50 megawatts, electric transmission lines and associated facilities of 100 kilovolts or more, and gas pipelines greater than 500 feet in length. When House Bill 15 went through the legislative process, we were very happy to see that stakeholders and legislators recognized the importance of public input. There was a concerted effort to strike a balance between streamlining the siting process while while also ensuring that the public had an opportunity for their voices to be heard. I can assure you that I, as chair of the Ohio Power Sighting Board, as well as my fellow board members care very much about the community input and the process as it exists today allows for the thoughtful consideration of public feedback just as it always has More specifically when a developer files an application, they must send notice to impacted neighbors, local government leaders, and publish notice in the newspaper. There's also a public comment section in the Power Sighting Board docket. Staff reviews all public comments and summarizes them in their report. Staff also explains in their report why they did or did not adopt the suggestions that were in the comments. Then parties can file to intervene, and they can also ask for a hearing. And we also have the ability to suspend the matter pending the outcome of a hearing or simply just more review by our staff. So I believe that these new timeframes are working exactly as designed and protect the rights of the local citizens to be heard. This wasn't necessarily an easy needle to thread, but you did it. So thank you very much for that. So what is this done? What has House Bill 15 done? What does it look like in Ohio? What you have in front of you is a graph and a list. In 2025 alone, the Power Siting Board authorized the construction of or had applications submitted for over 2,000 megawatts of behind-the-meter dispatchable generation. In addition to behind-the-meter applications, we have been provided pre-application notice that another 2,755 megawatts, our traditional gas generating facilities, intend to expand their existing facilities or site new generation in the state. Ohio was a regional leader in 2025 in generation project announcements. So again, all of the projects on this slide were announced in 2025. So just to put this into perspective, this is more gas fire generation that has been applied to be sited or has been sited in Ohio than in the past 20 years collectively. That's a really big deal. So moving to solar, in 2025, the Power Siting Board approved four projects for a total of 691 megawatts of solar generation. Since I became chair in the March of 2021, the board has approved approximately 7,420 megawatts of solar generation in this state. In terms of project numbers, that's 39 total solar projects, six of which also have battery storage. Ohio actually ranks number 12 in the nation for installed solar capacity, the majority of that being utility-scale solar projects. 2025 was definitely an exciting year in Ohio, but 2026 is looking even better. The Energy Information Administration recently reported that over 80 percent of the planned natural gas capacity coming online in the United States this year will be located across five states. One of those states is Ohio. The other four are Texas, Oklahoma, Tennessee and Florida. Just last month, the Trump administration announced a $33 billion, 10,000-megawatt natural gas plant project to be completed in Piketon, Ohio. This will be one of, if not the largest gas plant in the United States. Additionally this year, an 800-megawatt-behind-the-meter natural gas plant has been announced to be built in Asheville, Ohio, and a 1,300-megawatt-behind-the-meter natural gas plant was announced to be built in Millersport, Ohio. Also, as you know, Ohio has a rich tradition as a leader in nuclear, and we excited about the role it can play in the future Earlier this year Vistra announced plans to expand the capacity at the Davis and Perry nuclear power plants Additionally META has entered into long power purchase agreements with the plants, ensuring the clean, reliable power produced here in Ohio is available for years to come. Okwo also recently announced its plan to build up to 1,200 megawatts of SMRs, small modular reactors, in Pikedon. This is really, really exciting and frankly something we never would have contemplated happening even 18 months ago. So let's talk for a minute about our advocacy at PJM. I call it advocacy. I hope you call it advocacy. Awesome. In 2024, Governor DeWine asked PJM to consider a separate queue to fast-track baseload reliability projects. In response, PJM made a filing with FERC asking for the Reliability Resource Initiative, a one-time accelerated queue opportunity to bring dispatchable generating resources online quickly to preserve reliability. FERC approved the request and PJM created the RRI. PJM approved 51 projects as part of this initiative. Nine are located in Ohio. We came in only second to Virginia with the number of approved projects in this queue for a total of over 3,000 megawatts, all of which are natural gas fire generation and expected to come online no later than 2031. Switching gears a little bit to ratepayer protections, which of course are always at the forefront of all of our minds, House Bill 15 created a multitude of statutory changes for the benefit of ratepayers. By eliminating ESPs and the riders contained within them, as well as requiring more regular rate cases with annual true-ups, we are providing more transparency into utility expenses and cost recovery, thereby protecting ratepayers. House Bill 15 also requires additional notifications to shopping customers when they are transitioning from a fixed rate to a variable rate, which is another important step in ratepayer protection. The bill also provides flexibility for behind-the-meter generation to be constructed, providing much-needed generation to even out the supply, demand, and balance to the benefit, of course, of our ratepayers. Also in Ohio and around the country, we have seen exponential growth in data center development. Along with that development comes an increased energy demand and, in turn, the need, of course, to protect other ratepayers from the costs incurred in serving these important but energy-intensive businesses. In 2024, AEP reported that load growth caused by data center demand was projected to double in central Ohio by 2030. In May of 2024, AEP Ohio proposed a tariff specific to data centers that requested long-term capacity commitments that would protect AEP Ohio's other customers from the cost of the infrastructure needed to serve them, as well as, really importantly, assist AEP in refining their forecasting to ensure that infrastructure build-out accurately reflects the actual demand. In July 2025, the PUCO approved the tariff. As a result, AEP was able to adjust its original forecast of 30,000 megawatts, a projected new data center load, to 5,600. Still a huge number, but not as big as 30,000. To our knowledge, Ohio was the first state to create a specific tariff as it relates to data centers. Additionally, Governor DeWine joined 12 other governors in the PJM region and the White House's National Energy Dominance Council in signing a statement of principles urging PJM to protect non center customers from increased energy prices caused by data center demand The principles outlined several provisions including a one auction that would offer long contracts to new generation to serve data centers and of course they would be responsible for the cost. So all of these things were done in a concerted effort to protect Ohio's rate payers. So Ohio is also a leader across the region. The organization of PJM states, which we call OPSI, is an organization of public utilities commissions within the PJM region. OPSE conducts issue analysis and formulates policy related to PJM, its operations, its independent market monitor, and FERC-related matters. Currently, PUCO Commissioner Dennis Deeters, who is here today, is the President of OPSE, ensuring that Ohio has a strong voice in important policies being contemplated at PJM. For example, OPSE is currently establishing cost allocation mechanisms for long-term transmission projects as required by FERC. With the increase in transmission costs across the nation, there is a lot at stake for our rate payers, and it's really important that we are a leader in those conversations, and thanks to Commissioner Dieters, we are. Additionally, the Mid-Atlantic Conference of Regulatory Utilities Commissioners, we call it MACROOC, provides a forum for discussion on important regulatory topics with all of our neighboring states and the sharing of best practices, and Commissioner Dieters is also president of MacRuke. Finally, the Federal Energy Advocate, or FEA, is housed within the PUCO. The office's responsibilities include, but are not limited to, federal advocacy, forecasting, and monitoring PJM's markets. We are fortunate and really unique, frankly, to have the statutorily created office to advocate on behalf of Ohio and its ratepayers. So as you can see, through collaborative efforts of the legislature, the governor, the PUCO, and the office of the FEA, Ohio is a leader in energy policy. We have positioned ourselves as an attractive place for businesses to locate, especially given the ability to bring your own generation so that operations can move quickly. Thank you to the members and leadership of this committee and the entire Ohio General Assembly for giving us the statutory direction and guidance that has driven so many of these important energy-related achievements for Ohio. We look forward to continuing this effort together, building upon the strong foundation that we have all worked to create over the years. I truly believe that our best days are ahead of us.

ready. Chairman Chavez, Vice Chairman Landis, Ranking Member Smith, good morning to the entire committee. Thank you very much for the opportunity to be here. My presentation is going to be focused really on this historic load growth that we are seeing, historic growth in demand, growth like we haven't seen since the Industrial Revolution. And what we are doing as a grid operator to try and prepare the grid for this historic load growth, maintaining reliability, and also being very conscientious of affordability as we advance through this new world. Again, thank you very much for the opportunity to be here. I'm going to borrow the clicker there, Chair. And first, just a few introductory slides about PJAM interconnection. We have the good fortune of being a mission-driven organization. We functionally exist as a non-for-profit. have shareholders or share prices. We are fully regulated by the Federal Energy Regulatory Commission and again get the opportunity to be a mission-driven organization on a day-to-day basis. That mission, our North Star, is grid reliability. So our primary focus on a day-to-day basis is to maintain reliability of what we call the bulk electric system for 67 million consumers across 13 states and the District of Columbia. Now, we do this function, and I think we do this function with a lot of excellence, and we do it very quietly. Two winters ago, we hit our all-time winter peak over Martin Luther King Jr. weekend. This past year, we had two major weather events. One was a historically deep sub-freeze in mid-January, and then winter storm fern in late January. We successfully were able to keep the lights on, again, for all 67 million consumers in the footprint. I encourage you at some point to please take a field trip up to PJM and see the movement of electrons across a multi-state power grid in literal real time. It's really a marvel. I got certified to do this two years ago to actually work on the control room floor. I was told that they would never let me on the control room floor. No lawyers on the control room floor. So PJM's value proposition, if you're going to do this, if you're going to be part of a regional overarching marketplace, it should save people money. At the end of the day, our value proposition is conservatively $5 billion, dollars, and this is sort of benchmarked against if a state were to go it alone, what would that look like? Let's get into the sort of bones of what we want to talk about today, and that's, again, this historic demand growth that we are seeing primarily from the proliferation of data centers. There is some demand growth that is due to electrification and the onshoring of U.S. manufacturing, but primarily where we're seeing this major uptick in demand is through the proliferation of data centers, primarily to meet the sort of global race for AI supremacy. The numbers are pretty eye-popping. So our latest load forecast, which was conducted in January shows that in 15 years, we expect for our peak summer demand to be at 241,000 megawatts. Our current, I would think about our system as about 180,000 megawatt system with a, again, you just heard me talk about the winter peak, which was about 165,000 megawatts. So that's substantial, substantial growth. Now, how much of that growth is real? We're going to spend some time talking about that because I think that's an important facet of the supply-demand equation. The first thing we're going to talk about, though, is supply. And so if you have been part of these discussions over the last few years, you've probably heard about PJM's generation interconnection queue. The queue is the line that prospective generators get into to be electrically studied so that they can plug into the power grid. Okay, that queue has been fully reformed and I happy to report that queue is open for business a project that wants to apply to get into the Q as opposed to sort of being caught up in this backlog You will now be processed within a one to two year turnaround timeframe. We are actually working with Google, ironically, through their AI technologies to try and expedite that timeframe from one to two years to shorter. We also have a lot of, we'll just characterize them as fast lanes or on-ramps, because logically there are sometimes reasons why you conceivably should not sit in the queue and be studied. A very simple example is if you are a developer and you are buying, will characterize it as the site of a former coal plant. And you want to build, let's call, let's say a solar farm and put a battery on that property. Well, we know that you can already inject a particular number of megawatts onto the grid from that site and keep the system reliable. So that is sort of one fast lane. We call that capacity interconnection rights transfer, and there are a few other fast lanes as well that you can utilize to try and bring supply onto the system quicker. That last column is something that we've been providing attention to and providing this data to all over the past few years, which is we have a lot of projects that have completed the PJM processes, that they've got nothing left to do with PJM. They've been studied, okay, but they are not building out. And why aren't they building out? Here are the reasons that we are given on the next slide. And so we've been keeping tabs on the why are we not getting constructed, why are you not putting steel in the ground? Because if you think about it, we're a 180,000 or so megawatt system, and we expect for peak demand in 15 years to be 241,000 megawatts, and we already have 54,000 megawatts that are just sort of out there on the street. We get all that built out, we're going to be in great shape. But we are not seeing that construction. We're not seeing that construction keeping pace with the increase in demand. And again, here are some of the reasons that are provided. This is not Ohio-specific. This is region-specific. But from talking to our developers, again, that's the reason that we are given. But now Ohio is actually, to continue a theme from Chair French's discussion, Ohio is actually really doing quite well in the new generation sphere. These are Ohio-specific stats. I didn't include a slide like this for all 14 jurisdictions, but just so you know, the only other state that has more power either, well, in the aggregate of either having agreements or being studied is Virginia. They have the largest concentration of data centers in the nation, Data Center Alley, so it makes sense that they would have a lot of power that is sort of queued up. But Ohio has a substantial number of both projects and total number of megawatts or gigawatts that either have their agreements or are being studied and a lot which have not yet entered the Q or are in the Q framework somewhere. Pursuant to what Chair French said, we're going to see a lot more actually find their way into our study process as well. So Ohio is certainly a success story on the trying to bring new supply to the system And I think frankly Ohio is very well positioned to take advantage of this load growth And we can talk a little bit about some of the dynamics behind that It goes into the concept of being sort of a restructure, relying on the market state. There are seven of you. I think you are very, very well positioned amidst that seven to bring a lot of new supply to the state. I want to spend just the next five or so minutes just talking about what PJM is doing to try and meet this significant load growth. And the board, our PJM board, made a decision in January of this year that was the culmination of many months of stakeholder discussions around this concept of how do we integrate these data centers into the system and do so reliably. We'll talk about each one of these things just very quickly, each one of these board decisional items very quickly. So if we're concerned about supply and demand, we've got to make sure that we get demand as close to right as we can. It's a forecast. It'll never be 100% accurate. But we want to get it as close to accurate as we can. There are a series of improvements that we are making. I'll highlight the state PSC or PUC opportunity for review. one thing that we found is that our state government actually has sort of better information than certainly we have, and so it can act as a check against whatever the information that ultimately transmission owners provide to us that goes into the load forecast. And I should have started there. So our information is only as good as what our transmission owners provide to us. OK, so what you want to do is try and create as many checks against that information as possible. We fully trust what our transmission owners are providing us. But let's sharpen our pencils a little bit. The other item that I think will be helpful to us in crafting this load forecast is this idea of duplicative requests. So someone could come to Ohio and say, hey, we're going to construct a data center. Well, how do we know that that same data center developer has not gone to, I don't know, Pennsylvania and said we're going to construct it over here? So we need to be able to get at those duplicative requests. Also, the more that we can see the financial obligations that have been created between data center and utility, I think will also be very helpful in our evaluation of crafting the load forecast. Price cap and floor. This has been a bit of a saga at the organization, but we did agree to extend the price cap and floor for an additional two years. So the prices spiked as a result of PJM's capacity market for a lot of consumers. It's not the only reason prices have spiked for consumers, but we saw a pretty dramatic increase, one-time increase, from what was roughly $28 a megawatt day to $270 a megawatt day. It's a pretty substantial increase. PJM and sort of its – again, its mission is reliability, but we have to be very conscientious of what's going on out there with consumers. Ultimately, we're a mission-driven organization that exists to serve consumers, 67 million of them. And so we agreed to cap the market for two years We agreed to extend that cap and floor for an additional two years So that marketplace that created upward cost pressure for consumers has now been capped until the mid-2030s. If you're following this stuff, you're going to immediately say, well, then how are you going to get new supply? That is a very fair question. Let me get to it. Very quickly, we're encouraging data centers to sort of craft their own solutions for the demand that they are bringing onto the system. We want for them to bring their own generation. That is sort of our and many in the industry's primary talker around data centers and the demand growth that they are creating on the system. Bring your own new generation. If you are going to bring your own new generation, that generation assumedly has some engagement with state government as well. there's an opportunity for sort of the collective, we'll characterize as state and data centers to say like, hey, this project is coming, it's coming fast, and we want to jump in the front of the queue line. The queue is already processing projects in one to two years. This is not, you know, that substantial of a time reduction. We're looking at about 10 months as opposed to one to two years. but it does provide an opportunity to, in the event that, and look, I think right now, when you look at new supply coming onto the system, one challenge that you've got is supply chain. Okay, so you are seeing amongst the major natural gas turbine manufacturers, GE, Siemens, you are seeing pretty substantial wait times for turbine subscriptions. But if you've been able to obtain these turbines from someplace, whether it's through subscription with these folks or others, and you believe that you can get on the system quickly, we want to try and get you through the queue quickly. The process and processes are important. We want to make sure to electrically study these things, but we've also got to be nimble as the dynamics continue to evolve and change on the PJM system. Okay, this is what we're working on right now. So we talked about, okay, how are you going to get new supply if the market's going to be capped for a particular period of time? It's this reliability backstop procurement. Okay, so PJM is currently in discussions with its stakeholders, states, National Energy Dominance Council out of the White House, trying to talk through how to develop a procurement framework to procure new supply. Okay. Okay, now in procuring that new supply, one thing that we're also working on with stakeholders, states, the White House, is how to allocate those costs to the data centers for the procurement of new supply. Okay, that's going to be a joint effort, jurisdictionally, PJMs, sort of jurisdiction as provided to it by the FERC stops at a particular place, and so we're going to need the assistance of others, including our state colleagues, to help us with the cost allocation piece. But this is the sort of gateway to try and obtain new supply in the very, very near term. And then I'm going to go back. I'm going to hit this first and then go back a slide. And then what we are also doing is we are conducting a very holistic look at all of our market structures to make sure that all of the incentives line up to incentivize new supply. And the reason we needed to do that is our capacity market framework, the market that we have capped until 2030, 2030, till mid-2030. That framework is basically a one-year spot price that is three years forward. That framework worked for a period of years and incentivized, frankly, the shale gas revolution, natural gas plants in the 2000s and early 2010s. What we're now seeing in the industry is a lot of long-term deals, PPAs, between data centers and existing generators and also data centers and conceivably new generators. That's the investment climate that we're in right now. Our independent power producers are effectively saying, we don't like the volatility of this one year, three years forward spot price. We like long-term certainty. So that's a really important data point for the grid operator who also operates competitive wholesale markets. So right now what we're doing is we're looking at that as well as all of our markets, but we're making sure all the incentives align, But in particular, that market to say, hey, does this fit the investment climate that we're seeing around us today? In the meantime, we have agreed to cap that capacity market because we still have to run an auction to secure what we presumed will be existing supply. But that price that's capped, that's not going to be enough to incentivize new supply. OK, and so that reliability backstop procurement could be pricey. Okay, but the whole sort of goal, part of the goal, is to allocate those costs to data centers eventually. That was a lot. We can unpack it a little bit. The only other thing that I wanted to discuss and sort of what the board decided is, so we've spent a lot of time talking about markets. Look, it takes, you know, a year, two years to build a data center. Okay, it takes five years, seven years to build new supply. Okay. we are going to have this period where reliability may be pretty well challenged as we wait for this new supply to get built commensurate with the growth and demand. And so one thing that we, the board decided was, hey, this is purely from an operational perspective. Data centers, no one has told us that we need to gate you. No one has told us that we need to stop you from finding its way onto the system. And actually, the FERC just ruled yesterday that we don't have the ability to do that. Our independent market monitor filed something. The FERC said, nope, we don't agree with you. PJM cannot gate the demand, nor have our policymakers said that they want us to gate the demand. But during this period where you're going to get a major uptick in demand, okay, you're going to get a major uptick in demand. You're waiting for the new supply, okay? there will be a period here where we are going to have to conceivably think about what I talked about in January with that historically deep sub freeze. We may have to tell data centers, hey, you need to go to your backups so as to prevent us from having to shed, for instance, residential load or other industrial manufacturing load. You've got these backups. You've got to go to these backups. In fact, this has been recognized by the Department of Energy. They gave us the authority in January to actually ask the data centers to move to those backups if they had to move to those. We didn't have to call on that. We didn't have to utilize that framework. But this is something else that the board has ordered up and we're working on as we speak. Okay, just really quickly. Actually same day that the PJM board pushed its guidance out for how it was going to integrate these data centers We actually got a statement of principles regarding PJM from all 13 of our governors and the White House There's quite a bit of symmetry, frankly, between what we decided and what the White House principles laid out. I actually think that our board's decision goes a bit further in consumer protection because of that. We talked about that connect and manage piece that, hey, data centers, you got to go to your backups. I actually think ours goes a bit further in consumer protection than the White House governor's principles. I've got some slides in the appendix. I wrote a piece in Utility Dive. I'm sure you all have that by your bedside and read it dutifully about how to deal with affordability on the retail side. This is calling on some past experience of mine. I would say the PUCO is out in front of this issue and has done actually an excellent job specifically with that second item. This is something that I travel the 14 jurisdictions and I cite that data center entry commitments tariff that the PUCO has put together with consistency. That's the existing installed capacity mix. Average system emission rates, we've actually made quite a bit of progress on emission reduction. And I always want to point this out, effective load carrying capability. It's important. You know, when I started in this job and decarbonization policy really took foot and say this all the time, decarbonization policy is a very laudable policy objective. We should all aspire to breathe cleaner air. At the same time, PJM is by its nature an engineering entity. What we do is we use science and math to keep the lights on, and so we've just got to be very conscientious of this particular concept. You don't have to keep track of the percentages, and they can change with each sort of passing year depending on how the technology advances, the formula, et cetera. But I just think keeping that concept in mind is always important. That is all for me, and looking forward to taking any questions folks may have. Thank you very much.

Thank you, Chairman, and thank you both for your testimony. I actually have two questions, if I could, please. And the first one will be a jump ball of whoever wants to take this. But in comparison, we hear so much about the data centers and the energy. How does that compare to a fully processing steel mill that is doing a hot melt, rolling all the operations that go into steelmaking, or an automobile manufacturer on one site? How does the energy consumption compare between data centers and something that's in the manufacturing sector? Sure.

Excellent Thank you And follow And this would be for Director French if I could please You know we referred to you know House Bill 15 and of course all the work that went into Senate Bill 2 you know, working and melding these two together. And we talk about behind the meter. Does House Bill 15 fully capture all the needs that we will have, any requirements? Are we missing anything in House Bill 15 to move forward with behind the meter that would make it even more effective and efficient?

Thank you, Director, and thank you, Chairman.

Thank you, Chairman. I can direct this to either of you. Well, actually, to PJM. You testified that there is a mechanism for fast-tracking some projects in the queue, but you didn't lay out any parameters for how the decision-making is to fast-track a particular project over one or another. Are there factors you take into place, and could you be a little bit more specific?

Follow-up? Follow-up. This is a different question. You alluded to the supply chain issues. Can you elaborate on some of that? And from a policy standpoint, what can states like Ohio and others do to increase that supply chain?

Thank you.

Thanks very much, Mr. Chair. Thank you both for being here. Mr. Hawk, as a former eight-year member of House Public Utilities, I've heard a lot of your presentations and appreciate the depth that you go into. You made a statement that the Q is fully reformed, meaning the PJM Q is fully reformed. How long has it been fully reformed?

Follow up, Mr. Chair? Follow up. So I'm looking at your slide 21, which is the general installed capacity mix. The PGM capacity mix has always the top three have always been natural gas, coal and nuclear, as long as I can remember.

And so I guess my question is, you know, how many gigawatts of solar were in the PJM queue, you know, back three years ago versus how many gigawatts have made it through the PJM reform process? You know, I just I'm a lot of this conversation is about obviously demand going up. My concern is supply not being able to enter the market. so I wonder if you could speak to whether or not because solar also has a much shorter lead time. I mean, we heard Chair French say that we're hoping to get this gas online by 2031 and solar can enter the market much quicker at least is my understanding.

Follow up. Thanks very much, Mr. Chair. So I appreciate that, and there's a lot of different ways I could go. When you're talking about site control, I mean, is that – I mean, obviously one of the things that we've seen in Ohio, which obviously is only one of your 13 states, is additional local government sign-off, which has taken, and again, you've got a map of Ohio and one of your present, or maybe that's Chair French's, the county shaded, yeah, I guess that's Chair French's, oh no, there it is, page nine. I don't know to what extent the map on page nine is, I mean, you didn't go into what the various shades of green were, But, I mean, is the additional local sign-off, is that part of the challenge for site control and getting some of the solar into the queue?

Senator Wilkin.

Yep. And that has to be what you can actually provide.

Is there any estimate for that? Depends on the combination that is put together, right? So it could be a bunch, a bunch, a bunch of solar. It could be solar plus battery storage. Okay, so what they'll do is they'll tell you, hey, what's the nameplate capacity of all of these resources? And then when you apply, it's not quite as precise, but when you apply sort of this degradation percentage to it, it's got to get to 250 megawatts of effectively UCAP.

Follow-up, and I'll remind you, Mr. Hawk, please submit your answers through the chair.

Follow-up.

I'd have to do the math on it. Let me do the math on it, and I'll get back to you.

Sorry, Chair.

Sorry. Sorry. My apologies.

I do, and I'm having trouble remembering exactly what it was. If you want to hit somebody, I'll let you know.

Thank you, Mr. Sorry I'm going to have to ask this question and then go to another committee. But in the last two weeks, we've had record flooding in Hawaii. We've had 30 inches of snow in the state up north in northern plains. We had power knocked out all over Ohio with a windstorm. We had the hottest day ever recorded in March. So regardless of what some people in Washington might think, there is climate change. It's real. and we're having more and more of these fluctuations between blizzards and cold weather and hot weather. Does your forecast take that stuff into consideration at all, or is it just about how much power we're going to need? Because my guess is it's going to get hotter in the summer, and we're going to have more of these storms in the winter that are going to knock out power. Does any of that stuff take into consideration for your future forecasting?

and operations frameworks we're gonna go back to Senator Wilkin thank you chair

No. Chair, to the senator, look, I think this gets complicated because, generally speaking, generators classify their generation capacity in terms of nameplate or installed capacity. So they'll say, hey, we can generate 100 megawatts of power. Okay, but there are a few different metrics out there. One of them is UCAP. We also utilize this effective load carrying capability to effectively say, okay, here's what you can, here's at least on average or what you're able to reliably generate. ELCC is here's what you're able to reliably generate during our most risky hours during the year. Okay. And so that's always a difference that we have to recognize. and look, we're happy to have these renewable resources find their way onto the system. It's not a condemnation of those resources. We were expecting, for instance, a significant amount of offshore wind to help backstop the grid during these last few years and it did not economically pencil out, at least initially, and now the policy trajectory doesn't want for offshore wind to find its way onto the system. Again, this is not a sort of condemnation of any of these resources, but it's just more so here the engineering realities of these resources.

Correct.

And we got a reserve margin of roughly 15 right now So we got in excess about we got in excess right now about you know, 16,000 megawatts compared to peak, okay? If that just gets eaten up without new generation being brought, that's going to be problematic for the system in full. So we encourage this idea of bringing your own new generation. if the demand is coming anyway and a data center says and we're going to bring our own new supply, well then that offsets the demand and we'll take it. Do we need more supply that is sort of divorced from a data center event? Yes we do. We do need more supply as well. So I think, you know, I appreciate the question, and, you know, I think we are going to need data centers to bring their own new generation. We're going to need more supply than that.

Thank you. I guess it technically counts. Last one, if I may. Follow-up. Is this, and I apologize for asking a lot of these estimator questions, but if you took out the data centers, is there any idea of what the growth would be or is there an estimate of what the growth would be? And don't get me wrong, I don't think we're going to – the data centers are here. They're going to be here somewhere, somehow. Yes. And we've got to figure out the best way to deal with those. But what would be the growth without data centers? Do you have an estimate on that?

Thank you. Thanks for your patience.

And just for clarification, through the answers and questions to the chair is just to maintain the conversation so that it's not a free-flowing dialogue. Understood. I'm going to take a privilege of the chair and I'm going to follow up a little bit on Senator Wilkins' question. When you bring your own generation, our hope with House Bill 15 was that they would overbuild that generation with the ability to maybe connect to the grid to augment or to enhance if needed. I mean, that's just another layer of complication for PJM. You're not considering that unless there's a formal request. Is that correct?

I didn't process the question, unfortunately. If a data center needs 250 gigawatts and they build a 500 gigawatt power plant, our hope would be that they'd be able to connect to the grid and sell that additional capacity to the grid, and then maybe in a time of need we could take the other 250. But unless they make a formal request to connect to the grid, you're not considering any of that overbuilding of the behind-the-meter generation, are you?

Okay, so if the behind-the-meter generation, first of all, is fully isolated and is not connected to the grid, then we can't rely on it anyway. It's just electrically separate from the grid. But let's say that there is the ability to connect to the grid,

I'd like to make that as easy as possible. Yes. Going back to ranking member Smith.

Chairman, to the ranking member. We are still in the same supply demand sort of challenged environment, but it is just enhanced or exacerbated by the overlay of the data centers. What's changed since the 4-R report? Well, certainly the data center load growth that's extremely difficult to anticipate, and we're all still trying to wrap our arms around it, like how much of it is real, like how much of it is ultimately going to drive reliability and affordability concerns. Our market monitor has been very clear that the cost increases in all things PJM are attributable to the data centers. And so we're all still kind of wrapping arms around this a little bit. But I would say that the supply-demand fundamentals and the concerns that we've expressed about supply-demand still exist. On the demand side, they're pretty exacerbated by the data center load growth. I think we've seen kind of a rollback in some of the existing supply environmental rules out of DC and out of some of our states who are now expressing worry about affordability and are saying you know what we need to take a break on some of these decarbonization rules because affordability is being deeply challenged and we cannot sort of afford no pun intended to continue on with these policies And so I think the supply situation is probably a bit of a better forecast for the existing fleet when you looked out to a particular number of years at environmental rules. I think the demand side of the equation is more challenging. I think it's going to be more challenging than what the 4R report indicated. I think it's going to be much more. We have a reserve margin of 15%. that reserve margin will slowly but surely get eaten up. What that means is that you're effectively in a challenge reliability environment. So we're going to have to be very accurate in the control room that I showed you the picture of in how we navigate electrons, and we're going to have to use that connect and manage thing where we tell data centers you've got to get off the system. So during times of cold weather, during times of extreme heat, you've got to get off the system, otherwise we're going to have to shed load. And so that's going to start to be part of our framework on a going forward basis. What you're also going to see when you see this kind of supply-demand dynamic is just costs are going to go up. And ultimately the question will become who has to pay? Who pays? Who pays for the transmission infrastructure build out? who pays for the new supply that naturally needs to find its way to our power grid in order to maintain reliability ultimately, but also tamp down some of the affordability concerns ultimately.

Thank you, Mr. Chairman. Yeah, chairman to the ranking member. We have we filed ourselves to extend the price collar. So that market is going to be capped till mid 2030. All right. So you're not going to see a jump in pricing as a result of the capacity market until beyond 2030, conceivably, mid-2030. And by then we may have a different iteration of that marketplace pursuant to my presentation So that on the generation side We are going to be procuring more power We have to procure more power And what the what the govs in the White House said is we want you to allocate those costs to the data centers. We can conduct that procurement and send the wholesale costs to a zone or to a state. Okay. And then a conversation that I've been having with Chair French is around how to then allocate those costs conceivably to the data centers. All right. That's generation. OK. On the transmission front, transmission is going to have to get built out in order to serve this major increase in demand. I mean, that is that is real. That grid needs to the grid also needs to grow in order to serve this demand. That there then is also a question of who pays for that. I can't say with any certainty, nor would I, that the costs associated with building out the power grid in order to meet this influx of data centers is going to go down. That's not reality. Those costs are going to increase. The question is who pays. And so I think that that is, again, conversationally with the chair, we've had these discussions around, hey, how do you take the wholesale cost of either generation or transmission and then allocate that cost to whoever's appropriate? And in Ohio, there are quite a few data centers that are finding their way to the state, so perhaps that's appropriate. Governor DeWine believes that's appropriate. The White House believes that's appropriate. All the governors in our footprint believe that's appropriate. But ultimately, you know, our ability to effectuate that, we're going to build out the grid, right? We've got to keep the lights on. Our ability to effectuate that who pays piece ends at a particular point. We're going to do our best to get this sort of turnkey, but it will end at a particular point. And then we'll have to have others, whether it's state commissions, municipals, co-ops, et cetera, take ownership then. And I want to be cognizant that not everything is blameable to the data centers, right? So the grid was built by our parents and our grandparents. Sure. So it needs to be updated for reliability in general. So I just want to make sure that that's clear.

Thank you, Mr. Chairman. Mr. Haig, Chair French, thank you both for being here today for this very important presentation. You know, if you look at advanced manufacturing, there are five things, and I believe that is the future of America and the future of Ohio. They're generally speaking five things that businesses are looking for, and I believe Ohio has a significant advantage in the majority of those five things. And I believe if we can get these five things right, we will financially dominate the rest of the country within two to four decades. One of those critical pieces that energy are looking for, I'm sorry, that businesses are looking for are energy that is in this order. Affordable, reliable, and clean. Natural gas fits that definition of affordable, reliable, and clean. It's my understanding that Ohio has more natural gas reserves than almost any other country in the world. And if you were to take Pennsylvania, Ohio, and West Virginia out of America's mix, we have more natural gas reserves than the rest of the country combined. So if we can unleash those I think it would go a long way in addressing many questions that were asked by my colleagues about supply and demand And to quote your exact words Mr Haake there been a major uptick in demand without a new supply without the relative uptick in supply. So my question is, is there a way for us to get out of PJM's thumb? And please don't take that as derogatory. You guys are value-added, appreciate everything you do. But if we were to just look at generation and transmission that was intrastate only, the hopes of which were trying to speed up the timeline, is that possible for us to do that and get out from under PJM's rules and regulations that some would say are onerous?

Follow up, Mr. Chair. Follow up. I think you answered the question the way I was hoping you did, I think. Sure. Chairman Frenchman, my question is from you, and it kind of follows up on a comment Senator Smith made about the headline, AEP is having record profits. It is my understanding that AEP recently included data center load forecasts in other small businesses' rate classes for a regulatory filing. So is that understanding a correct understanding, and do you know why AEP did this, and would this create cost shifting for new transmission from new companies versus old companies that paid for their old transition?

Follow up, Mr. Chairman?

Yep. Thank you very much for that answer. That's what I was hoping to hear. As you know, there is a tremendous amount of frustration expressed from current manufacturers that have paid for their own cost, and now they're being asked to pay for the cost for these new data centers, and I don't see that as anything other than an unfair cost shift, my personal opinion. Chair French, AEP recently stated about 12 gigawatts of Ohio data center load is forecast is not subject to the data center tariff. That's more demand than all of AEP Ohio presently. What is PUCO doing to protect customers if this low does not show up?

Thank you. Mr. Chairman, I do have a few more questions, but I know Senator Serino does as well.

and we'll get answers from him.

Senator Serino. Thank you, Mr. Chairman. Thank you, Senator, for the deference here. I have a two-part question. and I guess for both of you, you can answer respectively. The first one has to do with FERC. And by the way, I did have a chance to visit PJM back in I think 2018 And it is quite impressive And everybody should try to go look at it It looks like something out of NORAD actually It's very scary as well. And I'm glad they're not letting you touch all of the settings and so on.

So on that same trip, we visited with FERC in D.C., with Congressman Joyce's, through Congressman Joyce's office. And FERC was very dysfunctional at that time. It was the first Trump administration. Chatterjee was the chair at the time we visited. We met with him. They were extremely dysfunctional. I know they are the overseers of PJM, right? So the first part of my question is, can you just talk a little bit about, and briefly, given our time constraints, what that relationship is like now, and are they more functional than they were in the past?

So understand the role that they play, but are they, in your opinion, more functional? Are they conducting their business? I know they're your regulator and you're reluctant to say, but are they, back then they were not even, they didn't have enough members for a quorum on occasion.

Is it better? Yes, kind of yes or no?

Okay, okay. And the second part of my question was, it's hypothetical. Michael, I'd love to just get your 30 seconds kind of view. Back in the run-up to House Bill 6, I was a county commissioner where the Perry nuclear plant is, and we fought very hard to keep both Davis-Bessey and Perry open. Both of those plants, had there not been the intervention that the legislature took, aside from all the other garbage that happened, both of those plants would have been decommissioned probably two years ago. Without that baseload, where would we be today?

And Senator Lang, you said reliable, affordable, clean. Not affordable, reliable, and clean. I apologize for the order, but you're right.

And I'm not going to put words in your mouth, but I'm going to amend with my own statement. I believe that goes for coal-fired power plants as well. The effluent from the coal plants with the scrubbers and everything, it meets all the standards. We need that baseload generation. We need to protect that.

Would that be a reasonable estimate?

Thank you.

I'll begin with, I think you are very well positioned across the board for all of these technologies. I think you're very, very well positioned. So you are a restructured jurisdiction. You are relying on the markets. HB 15 doubled down on that. Of the seven jurisdictions that are restructured, I would say Ohio appears to be, in my estimation right now, the only one that is, you can definitively build out every type of resource. Okay? So from just purely a how are you positioned vis-a-vis your colleagues, I think you are positioned extremely, extremely well. And I am hoping for, just like the update that was provided by Chair French today, a continued upward trajectory for the state of Ohio because you are, like I said, very well positioned and have done your best to create an environment that will allow for new supply to come to the system.

My question will take more than a minute to respond to, and I doubt being an elected official who sometimes we're accused of pontificating that I could even ask the question in less than a minute, so I will submit it in writing to the chair.

Thank you. Real quick, for anyone that might say, hey, there's really no shortage of generation. This is a made up thing. What's your response to that?

Thank you.