questions. Testimony was offered in writing and had been filed before the hearing.
“There will be little additional direct cost to AEP Ohio’s system” as a result of the discount, said Charles Daitch, manager of energy initiatives for Amazon, in his written testimony.
He said the net cost would be small, in part because Amazon has paid for electricity substations at each of three data center sites, which is a cost that otherwise would be paid by AEP and passed on to its consumers.
After an unspecified small cost to start, the data center projects would be on track to eventually provide a net benefit to the AEP system, which would mean other customers would pay less than they would have without the projects, he said.
Another witness, Michael Haugh, an analyst for the Office of the Ohio Consumers’ Counsel, has issued written testimony and will appear at the hearing sometime later.
“As noted economist Milton Friedman famously remarked, ‘There’s no such thing as a free lunch’ — and AEP can be expected to seek to make up the reduced revenues from other customers,” Haugh said in his testimony.
Amazon has not been forthcoming with details about its plans.
In its application with the PUCO for the discount, the company has blacked out just about every key number, including estimates of total savings for Amazon and estimates of the company’s total employment and investment in the project. The company says the figures should be treated as trade secrets under Ohio law.
The co-applicants for the discount are Vadata Inc., which is part of Amazon, and AEP, the Columbus-based utility. They are proposing a 10-year deal in which Amazon would not need to pay certain parts of its electricity bill and also would receive a percentage discount off of base delivery charges.
Scott Blake, an AEP spokesman, said such arrangements can be beneficial.
“Partnering with companies like Amazon to bring jobs and tax revenue to the communities we serve is a huge win for our state’s economy. This will help increase Amazon’s investment in our state,” he said.
Ohio law allows utility companies to submit these kinds of agreements to help encourage large employers to make investments in the state. The hearing is likely to conclude this week, with a ruling by the PUCO to follow at some point.
Advocates for publicrecords access have raised concerns about the secrecy in this case.
Dennis Hetzel, president and executive director of the Ohio News Media Association, a trade group of which the Dispatch is a member, said in September that there is no clear reason why this information needs to be secret.