Explanation
Background
This ordinance requires the Director of Columbus Water and Power (CWP) to establish peak rates and/or other fees and charges to large load/high-volume industrial and manufacturing users.
Data center growth has become one of the defining utility policy questions facing cities nationwide, and Central Ohio - home to more than one hundred operational data centers, with close to two hundred statewide - sits at the center of that growth. Because chip fabrication, brewing and beverage, and food-processing facilities can place comparably significant demands on the City’s water, sewer, and power systems, this ordinance is built around industry-neutral principles of volumetric use and infrastructure cost-causation rather than any single sector.
Council began this work on November 24, 2025, when it adopted a floor amendment, introduced by Councilmember Wyche, directing Columbus Water and Power (CWP) to report back by June 30, 2026 on ensuring high water users support their fair share of infrastructure investment. That June 2026 report confirmed that the peak volume and variability of high-volume users justify allocating costs based on cost-causation rather than total consumption alone, cautioned that a volumetric-only rate structure effectively shifts infrastructure costs onto residential and small-commercial customers, and cited precedent from other jurisdictions, including a tiered high-demand surcharge used by the Prince William County Service Authority in Virginia. CWP is also evaluating complementary tools such as inclining block rates and capacity or connection charges, particularly as the new 48-million-gallon-per-day Home Road Water Plant expands the system that future growth will depend on.
This ordinance does not itself rewrite the City’s rate structure; that technical and legally complex work belongs to CWP, in consultation with the Utility Advisory Board. Instead, it sets a clear expectation and deadline for CWP to bring Council a concrete proposal ensuring that large load/ high-volume users - whatever their industry - pay their fair share of both the service they consume and the infrastructure needed to reliably support it.
Fiscal Impact: No funding is required for this legislation
Title
To require the Director of Columbus Water and Power (CWP) to establish peak rates and/or other fees and charges to large load/high-volume industrial and manufacturing users. ($0.00)
Body
WHEREAS, the rapid growth of data centers across the country has become one of the defining utility policy questions of the decade, and Central Ohio has emerged as one of the nation’s leading hubs for such growth, with more than one hundred operational data centers in the Columbus region and close to two hundred statewide; and
WHEREAS, data centers are not the only high-volume users of the City’s utility infrastructure, and chip fabrication facilities, breweries and beverage manufacturers, and agricultural and food-processing operations can place comparably significant demands on the City’s water, sewer, and power systems, warranting a policy response grounded in industry-neutral principles of volumetric use and infrastructure cost-causation; and
WHEREAS, on November 24, 2025, in approving the City’s 2026 water, sewer, and stormwater rate increases, Council adopted a floor amendment introduced by Councilmember Wyche directing Columbus Water and Power (CWP) to report back by June 30, 2026 on plans to ensure that high-volume users support their fair share of infrastructure investment; and
WHEREAS, the resulting June 2026 report found that the peak volume and peak variability of high-volume users place unique demands on the water system, and cautioned that a volumetric-only rate structure effectively subsidizes those users’ infrastructure costs on the backs of residential and small-commercial customers with flatter, less predictable demand; and
WHEREAS, it has become necessary in the usual daily operation of the City to require the Director of Columbus Water and Power to establish peak rates and/or other charges for large load/high-volume industrial and manufacturing users, and; NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS, OHIO:
SECTION 1. That for the purpose of this ordinance, “large load/high-volume peak users" is a customer of Columbus Water & Power whose water, sewer, or power demand is disproportionately large relative to typical residential or small-commercial usage. For the purposes of designating customers as “large load/high-volume peak users,” the definition is intended to be construed broadly, and may include, without limitation, data centers and colocation facilities, semiconductor and chip fabrication facilities, breweries and beverage or food manufacturers, or agricultural and food-processing operations.
SECTION 2. That in addition to the requirements codified in Section 1153.01 of the Columbus City Codes, on or before October 26, 2026, the Director of Columbus Water & Power, in consultation with the Utility Advisory Board, is hereby directed to prepare and submit to the City Clerk a material document recommending modifications to existing rate structures that includes the establishment of a new rate structure or classification for the express purpose of ensuring that large load/high-volume peak users of the City's water, sewer, and/or power utility services are assessed costs that reasonably reflect their volumetric use of such services as well as the capital investments and operational infrastructure necessary to reliably support that use.
SECTION 3. That the new rate structure shall be constructed with particular consideration given to large load/high-volume peak user facilities and shall:
a. To the extent to which it is practicably identifiable, recover the cost of providing water service to those facilities, including the capital, operating, and capacity costs attributable to large, concentrated, or variable water demand;
b. Recover the costs of water system infrastructure constructed or expanded to serve large load/high-volume customers; and
c. Account for the potential variability of data center water demand relative to other large-volume commercial or industrial customers, consistent with generally accepted water utility cost-of-service rate making principles.
SECTION 4. That in proposing a new rate structure in consideration of large load/high-volume peak users, the Director of Columbus Water & Power, in consultation with the Utility Advisory Board, shall consider the following
a. A tiered or block volumetric charge per unit of water consumed, with rates that increase as monthly or peak-day consumption increases;
b. A monthly capacity or demand charge based on meter size, contracted peak-day capacity, or historical peak demand;
c. A minimum monthly bill or annual minimum take obligation, calculated as a percentage of contracted capacity, to ensure recovery of fixed system costs regardless of actual usage;
d. A system development charge, capital contribution, or infrastructure participation charge, payable prior to or upon initial connection, to recover the cost of water system capacity, transmission, storage, or treatment infrastructure constructed to serve the facility; and
e. Seasonal or time-of-use pricing differentials where necessary to reflect system peaking costs.
SECTION 5. That the report provided to the City Clerk in accordance with Section 1153.01 of the Columbus City Codes shall further address the following:
a. The criteria or thresholds used to define the proposed large load/high-volume peak user or rate class;
b. The methodologies for allocating infrastructure and capacity costs to that class, consistent with generally accepted cost-of-service and cost-causation principles;
c. Any recommended contractual, tariff, or rate-design mechanisms (including but not limited to minimum-take provisions, infrastructure contribution charges, or capacity reservation fees);
d. An assessment of the estimated revenue that will be raised and the impact the generated revenue could have on future rate increases, and thus, an assessment of the anticipated impact on residential and small-commercial ratepayer affordability that this new revenue could mitigate;
e. A summary of regulatory approaches examined in other jurisdictions and the rationale for any approach recommended for Columbus Water and Power; and
f. The number of large load/high-volume customers likely affected, the range of water usage that these large load/high-volume users consume, and how that water usage is projected to change over the next decade.
SECTION 6. That the Director of Columbus Water and Power is further directed to provide Council with periodic progress updates in the course of preparing the material described herein, and to continue to engage the public, industry stakeholders, contract municipalities and their customers, and residents in that process, consistent with the ongoing community engagement convened by Council's Public Utilities and Sustainability Committee.
SECTION 7. That this Ordinance shall take effect and be in force from and after the earliest period allowed by law.