Free‑Market Microgrids: Ohio’s Unfinished Energy Reform

By Miranda Morrow, for eGeneration News – September 3, 2025

Ohio is in the throes of an unprecedented surge in electricity demand. Central Ohio’s data‑center load has ballooned from around 100 megawatts in 2020 to roughly 600 megawatts in 2024, and projections suggest it could exceed 5 gigawatts by 2030. In response, the Ohio General Assembly passed House Bill 15, a sweeping energy bill designed to attract new generation through tax cuts and streamlined permitting. While HB 15 represents a step toward a freer market, it falls short of the sweeping reforms Ohio needs.

Behind‑the‑Meter Isn’t a Failure—It’s a Market Signal

One of the most telling developments is the proliferation of behind‑the‑meter natural‑gas plants. The Ohio Power Siting Board recently approved Will‑Power OH’s Socrates South project, a 200‑MW plant that will feed power directly into a Meta data‑center campus. Two additional 200‑MW plants have been proposed to serve Intel’s $28 billion semiconductor campus thereportingproject.org, and EdgeConneX’s 120‑MW PowerConneX plant could break ground late next year. Critics claim these projects underscore the state’s failure to add grid capacity. That’s only partially true. What they really demonstrate is that FERC and PJM—the federal regulators responsible for wholesale markets and regional transmission—have failed to foster an environment where large loads can rely on timely interconnections and adequate transmission. In a properly functioning market, behind‑the‑meter generation would be a choice, not a necessity.

Rather than lament that companies are taking matters into their own hands, we should celebrate the fact that free‑market competition is providing solutions. These microgrids are proof that capital will flow where there’s a need—provided government doesn’t stand in the way. HB 15’s microgrid provisions, which allow multiple customers to share behind‑the‑meter generation without strict proximity requirements, are a good start. But as long as the Public Utilities Commission bars energy utilities and distribution companies from offering behind‑the‑meter solutions, competition will remain artificially constrained.

HB 15: A First Step, Not the Finish Line

HB 15 contained several forward‑looking elements. It slashes property tax rates for new generation and storage equipment, encourages energy development on brownfields, and repeals coal subsidies (which is one of the backward-looking elements). It also establishes a “mercantile customer self‑power system” that lets large users build microgrids. Despite these improvements, HB 15 doesn’t go far enough. The bill continues to prohibit utilities from owning generation, a vestige of outdated deregulation schemes that fragments responsibility. Worse, the law’s technology‑neutral incentives could subsidize intermittent wind and solar projects, whose volatility exacerbates grid instability.

To truly unlock Ohio’s energy potential, legislators must eliminate barriers that prevent utilities and distribution companies from competing behind the meter. They should allow well‑informed consumers to enter behind‑the‑meter agreements that deliver resilient power, and microgrids should be able to sell excess capacity when market conditions warrant. Current prohibitions silo microgrids, preventing surplus power from reaching neighbors and forcing expensive duplication of infrastructure. Such policies reveal an allegiance to a failing PJM/FERC model rather than to ratepayers.

The Cost of Inaction

Ohio’s energy challenges won’t be solved by tinkering at the margins. According to a report by The Reporting Project, data‑center demand is accelerating far faster than grid planners anticipated. Meanwhile, the Public Utilities Commission has been embroiled in scandal and mismanagement—so much so that it is now forcing data centers to pay for 85 percent of their reserved capacity regardless of usage to fund grid upgrades. At the same time, the Ohio Manufacturers’ Association and the Consumers’ Counsel are demanding that FirstEnergy repay more than $500 million for violations related to the HB 6 bribery scandal. These controversies highlight regulatory dysfunction rather than market failure.

If lawmakers don’t act soon, Ohio could face rolling brownouts and blackouts as early as next year. PJM has already warned of capacity shortfalls, and the closure of 39 coal units since 2014 has removed 12.3 gigawatts of baseload. Extreme cold snaps will test a system that is increasingly brittle due to aging infrastructure and politicized resource planning. And because PJM has dragged its feet on transmission upgrades and FERC is busy micromanaging interconnection rules, Ohio’s distribution network is more vulnerable than ever.

A Return to Long‑Term Thinking

Ohio stands at a crossroads. The choice is between ceding control to distant regulators and markets designed by Washington bureaucrats or embracing state‑level, long‑term planning in partnership with industry. Legislators must reclaim their authority, craft policies that encourage genuine competition, and remove the artificial barriers that protect incumbents at consumers’ expense. That includes allowing utilities to offer behind‑the‑meter services, letting microgrids trade power freely, and ensuring that dispatchable resources—natural gas, nuclear, and especially coal—remain the backbone of our energy system. Anything less leaves Ohioans at the mercy of a grid on the brink.