Ohio has long enjoyed a competitive edge in the cost of commercial electricity. It’s deregulated market and plentiful coal and gas-fired generation keep commercial power rates near 11.25 ¢/kWh—below the national business average of 13.3 ¢—as of March 2025, giving local manufacturers, data centers and research labs a sizable cost edge over coastal tech hubs. For instance:
- California’s commercial rate sits around 23.13 ¢/kWh—more than double Ohio’s;
- Massachusetts businesses face about 22.46 ¢/kWh;
- New York pays roughly 18.77 ¢/kWh; and
- Even the already-expensive Connecticut has climbed to 25.18 ¢/kWh.
On a 10 MW, 24/7 load, that spread translates into annual electric bills that can be $9–$12 million lower in Ohio than in Silicon Valley [1]. This fundamental advantage underpins the state’s appeal for energy-intensive advanced manufacturing, semiconductor packaging and emerging R&D facilities.
For reference, an average modern enterprise or colocation data center might run a continuous 24/7 electrical load of roughly 5–20 MW, and “hyperscale” facilities built for cloud and AI workloads are typically engineered for far larger baseloads—commonly 50–100 MW and potentially 150 MW or more per site. That’s 10-15 times the coastal cost differential above.
With attraction of new high-tech potential, energy demand will continue to rise dramatically. In response, Ohio is showing its commitment to developing new baseload generation with the recent passing of House Bill 15, which goes into effect August 14, 2025. Ohio leads the country in infrastructure and economic development investment and this legislation takes a market-driven approach needed to support future economic growth while improving affordability. Two key provisions in H.B. 15 seek to promote private energy development by: (i) expanding behind-the-meter generation opportunities to promote diverse energy portfolios and (ii) providing economic incentives for new energy infrastructure.
Expansion for Self-Generation Opportunities
Currently, Ohio Rev. Code §4928.01(A)(32) requires energy generation facilities to be located on a customer’s property, consuming electricity directly rather than feeding it into the grid. H.B. 15 establishes a “mercantile customer self-power system”, which is one or more electric generation facilities, electric storage facilities, or both, that meet all of the following:
- Produce electricity primarily for the consumption of a mercantile customer member or a group of mercantile customer members;
- Connect directly to the mercantile customer member’s side of the electric meter;
- Deliver electricity to the mercantile customer member’s side of the electric meter without the use of an EDU’s or electric cooperative’s distribution system or transmission system;
- Is located on either of the following:
- A property owned or controlled by a mercantile customer member or the entity that owns or operates the mercantile customer self-power system;
- Land adjacent to a mercantile customer member if the facilities directly connect with the customer.
By removing the proximity requirement, the legislation promotes flexibility in developing self-generating microgrids for industrial parks and groups of large customers. Allowing multiple customers to be part of a system encourages the development of a diverse energy portfolio to meet various customer needs, which will increase reliability and sustainability. Additionally, the legislation provides an exemption to customers from the Certified Territory Act (“CTA”) by specifying that retail electric service furnished to a mercantile customer member by a mercantile customer self-power system is not considered an electric service that must adhere to the CTA requirements.
As a result, a customer can now locate their system within existing electric supplier territories whether those territories belong to an investor-owned utility or non-profit electric cooperative. Finally, to promote private investment, H.B. 15 prohibits utilities from providing behind-the-meter electric generation services.
Development Incentives
The legislation allows a county, municipality or township to file a petition with the Ohio Department of Development to designate a brownfield or former coal mine site as a “priority investment area”. A development project within a priority investment area is eligible for a grant up to $10 million under the revised Brownfield Remediation Program. The bill expands the current definition of “remediation” to include activities necessary or conducive for generating, transporting, storing or transmitting electricity at the site. It also would create a new 5-year tax abatement for a brownfield property or property on the site of a former coal mines designated as a “priority investment area” by a local legislative authority.
Additionally, H.B. 15 modifies the extent to which the Tangible Personal Property (“TPP”) tax applies to the property of four types of entities:
- Electric companies: Generate, transmit or distribute electricity and are not rural electric companies or energy companies. This generally includes generating facilities such as natural gas-powered electric generating facilities.
- Co-ops: Rural electric companies and rural electric cooperatives.
- Energy companies: Generate, transmit or distribute electricity from a facility that has a nameplate capacity of more than 250 kilowatts and consists of wind turbines, solar panels, other renewable energy sources, clean coal or cogeneration technology. The bill effectively adds energy storage systems to this definition as described below.
- Pipe-line companies: Engage in transporting gas, oil or coal derivatives.
Similar to real property, utility TPP is assessed on only a portion of its true value, and this bill lowers that assessment percentage applicable to new electric generation, electric transmission and distribution, and conversion.
Other Incentives in Flux?
While Congress continues to debate energy and energy-related incentives, many of these are either outside of the scope of or are specifically retained in the currently-pending legislation (at least for now). With these additional incentives, many industrial users may see even larger energy savings in circumstances where the relevant criteria are met.
Here is a brief summary of key clean energy incentives as they currently stand in the Senate Finance Committee draft of the “One Big Beautiful Bill” released recently released:
In short, the current Senate proposal keeps Ohio-useful credits that lower the cost of firm, non-intermittent generation and manufacturing (48C, 48E, 45Y) while axing or sharply curtailing consumer, wind-/solar-centric and hydrogen provisions.
These programs will most certainly evolve further, so watch this space.
Conclusion
The pending legislation provides an exciting opportunity for Ohio industry, leveraging the state’s competitive position with new power generation programs (including renewable energy development) and is a commitment to continuing the explosive economic growth that Ohio has seen over the last few years in the high technology sector. Businesses interested in installing, manufacturing or investing in the growing energy sector can take advantage of H.B. 15. If you need legal advice and representation related to energy projects or high technology commercial facilities, we’re here to help.
[1] 10 MW × 24 h/day × 365 days = 87,600 MWh, or 87.6 million kWh. Using average March 2025 commercial rates reported by the U.S. Energy Information Administration—11.25 ¢/kWh in Ohio and 23.13 ¢/kWh in California—every kilowatt-hour costs about 11.88 ¢ less in Ohio. 0.1188 $/kWh × 87.6 million kWh ≈ $10.4 million. Repeating the same multiplication with the gaps between Ohio’s price and those of other tech-heavy states (e.g., 22.46 ¢ in Massachusetts, 18.77 ¢ in New York, 25.18 ¢ in Connecticut) yields savings that range from roughly $9 million to just over $12 million per year.
