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Affordable energy matters to every household and business in West Virginia. Electricity is essential to our homes, health systems, small businesses and manufacturers that support jobs across the state.
That is why affordability must remain at the center of every conversation about West Virginia's energy future. At Appalachian Power, we understand that rising electric rates are felt by families and businesses, and we take our responsibility to keep costs as low as possible seriously.
If we are committed to lowering costs for customers, we need to look for opportunities to spread the cost of generating and delivering electricity more broadly. That is where the conversation about data centers begins.
I'll be the first to admit that data centers can do a better job of telling their story. Too often, conversations about these projects are shaped by misinformation and overlook the contributions they can make to communities and the electric grid.
Water use, for example, has become an important topic of discussion. Those concerns deserve clear answers, but cooling technology has changed over time, and newer facilities use closed-loop (like the radiator in your car), hybrid or advanced cooling systems designed to reduce water consumption. More conversations grounded in accurate, up-to-date information are needed so local leaders and residents understand what is truly at stake.
Data centers may be one of the best opportunities we have to improve electric affordability in West Virginia.
One factor contributing to rising electricity rates is that the cost of providing electricity is being spread among fewer customers. Appalachian Power's service area in southern West Virginia has experienced steady population declines, with census data showing some county populations have fallen by as much as 15% since 2020. Yet many of the costs of maintaining a reliable electric system remain regardless of how many customers it serves.
For years, large customers such as coal mines and chemical plants purchased significant amounts of electricity, helping spread the costs of the electric system across more users. As many of those businesses have closed or reduced operations, remaining residential and commercial customers have been left to shoulder a larger share of those costs.
How do we break that cycle? We grow our way out of it.
West Virginia is on the cusp of a spike in energy demand unlike anything we have seen before. Data centers are seeking gigawatts of power, with a single gigawatt roughly equivalent to enough power to serve hundreds of thousands of homes. West Virginia should welcome the opportunity to serve them. Beyond the economic development they can bring, these facilities offer a path to strengthen our electric system and broaden the base of customers supporting it.
The benefits extend well beyond the electric grid. Major data center developments can support thousands of construction jobs, creating opportunities for skilled trades, contractors, suppliers and local businesses. Once operational, these campuses can provide hundreds of permanent, high-paying jobs. They also can generate significant tax revenue that localities can use to support schools, emergency services, roads and other community priorities.
By adding large energy users to the grid, we can distribute the costs of operating and maintaining our electric system among more customers. Transmission lines, substations and other major infrastructure become more affordable for residents and small businesses when more users help cover those costs. That represents a significant opportunity for West Virginia families and communities.
While some states and localities are turning data centers away, West Virginia should recognize the advantages they can bring. We applaud state and local leaders who are approaching the data center conversation with clear eyes, working to ensure these facilities benefit their communities while Appalachian Power does its part to protect customers.
Our new large-load tariff for customers such as data centers is an important part of that protection. It is designed so households and other existing customers do not bear the costs of the generation and transmission infrastructure needed to serve these large users. Data centers will be responsible for the costs associated with serving their operations while also contributing to the broader electric system that serves all customers. In addition, Appalachian Power signed the White House's Ratepayer Protection Pledge, which reinforces our belief that the costs needed to serve growth should be paid by the customers creating that demand, not by existing customers.
West Virginia has an opportunity to bring new investment, jobs and tax revenue to our communities while strengthening the electric grid. Appalachian Power is prepared to be a partner in that growth, but our responsibility to the customers we serve today comes first.
We can welcome new investment while protecting West Virginia families from the costs of serving these enormous new loads. Those are not competing goals. Done responsibly, data centers can help broaden the base of customers supporting our electric system, strengthen the grid and contribute to a more affordable and resilient energy future for West Virginia.
Brian Abraham is president and COO of Appalachian Power.