Republican candidate for governor Vivek Ramaswamy made an attention-grabbing claim earlier this summer about his plans to regulate data centers.
The billionaire tech entrepreneur promised that Ohioans who live near future data centers would receive free electricity. The plan would involve requiring data center developers to give away extra electricity generated by the private power plants that AI companies increasingly are building to power their projects.
“If a data center is built in your community, then … you will no longer have to pay for your home’s electricity,” Ramaswamy said in an opinion article published in The Columbus Dispatch and on his campaign website.
Data centers that don’t agree to provide the free electricity – as well as meet several other conditions, such as following environmental standards – wouldn’t get state approval, he said.
The plan goes way beyond what politicians typically have pledged to address rising public concerns about the data centers’ effects on electricity demand and the environment. Ramaswamy’s Democratic opponent, Amy Acton, has a more modest proposal that calls for a set of environmental, transparency and labor standards for the facilities.
The boldness of Ramaswamy’s plan raises some obvious questions. Would he have the authority to force AI companies to give away free electricity to homeowners? Is it even technically possible?
Signal Statewide put these and other questions to energy and data center experts. They described Ramaswamy’s plan to hook up data center power plants to neighbors’ homes as ranging from fanciful to extremely complex because of the thicket of state, multistate and federal entities involved in regulating energy policy.
“I don’t know anybody who thinks that it’s a workable idea,” said Ashley Brown, executive director of the Harvard Electricity Policy Group and a former Public Utilities Commission of Ohio commissioner under former Democratic Gov. Ted Celeste. “It just doesn’t make any sense.”
The Ramaswamy campaign didn’t respond to a request from Signal Statewide to have its expert detail the plan for us.
But Ramaswamy’s plan appears to acknowledge practical challenges by offering data centers a simpler alternative. It says developers instead could just provide nearby residents with a direct subsidy – a potential fallback that would eliminate the need to navigate the regulatory issues surrounding his promises.
Here are some important takeaways from Ramaswamy’s plan.
The sales pitch: Free electricity
The headline of Ramaswamy’s plan is a pledge to block future data centers unless they provide free electricity to nearby residents.
Ramaswamy described his plan in plain terms, saying it would provide free electricity to residents in communities – potentially for the whole county – where new data centers are built.
He said he would accomplish this via an executive order on his first day in office that would halt all data center projects until the legislature passes a package of new data center laws.
The fine print limits what would actually be free
But he’s later clarified some important fine print in his plan. In an interview with Ohio Public Radio, he said those residents would still receive a power bill.
That’s because every electricity customer’s bill contains charges related to the three parts of providing electricity:
1. Generating the power with a power plant
2. Transmitting it long distances via high-voltage wires, and
3. Bringing it directly to homes and other customers using local power lines.
Ramaswamy said his plan would cover just one part – generating the electricity. Generation makes up on average about half of a customer’s power bill, according to the Ohio Consumers’ Counsel, a state utility watchdog agency.
That means the other two parts of the bill – or about half – for transmission and distribution would remain.
Practically speaking, giving away electricity won’t be easy
Ramaswamy described his policy working like this: Large data centers increasingly are building their own on-site power plants to satisfy the facilities’ huge electricity demands as quickly as possible.
Ramaswamy wrote that communities could receive the extra power they generate by connecting the plants to the larger power grid.
He compared the arrangement to the electricity supply deals large businesses and communities regularly strike with power plants. But in Ramaswamy’s plan, this extra electricity would be free to residential customers near data centers.
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The plan faces legal and practical barriers
Kim Bojko, a longtime Columbus energy policy lawyer, Kim Bojko, told Signal Statewide that Ramaswamy’s plan faces numerous legal and practical barriers.
Among them is a U.S. constitutional restriction that limits the government from taking property – in this case, electricity – without providing fair compensation.
And she said there’s a physical problem: Data centers increasingly are trying to build their own power plants for a reason – doing so allows them to avoid lengthy delays involved in getting permission from regulators to connect the broader power grid. How would these data centers transmit their extra electricity if they’re not tied into the grid?
Finally, there are multiple layers of government and businesses involved with running the electricity grid and building power plants. Ramaswamy would have strong influence over some if he’s elected governor, such as the Public Utilities Commission of Ohio and the Ohio Environmental Protection Agency.
He would not have such influence over others, including private utility companies and PJM, the agency that operates the 13-state grid that incudes Ohio.
Ramaswamy’s plan would need legislative buy-in
In addition, Ramaswamy would have to persuade the legislature to undo or tweak state laws that bar utilities from giving away free electricity or giving preferential treatment to different kinds of customers.
“So, there’s a legal problem, there’s a policy problem and there’s a physical problem,” Bojko said. “I mean, discriminatory treatment and free electricity have been around forever. But I don’t know how you undo everything. There’s just so much we would have to change.”
Bojko said her phone blew up after Ramaswamy announced his plan, leading her to research it. But she also described not knowing how seriously to take it.
“I got like five calls that day within 20 minutes of the announcement,” said Bojko, who works as energy policy counsel for the Ohio Manufacturers Association, a business group that’s endorsed Ramaswamy in this year’s race. “And I’m like ‘He’s not even governor yet. This is a stump speech. How many stump speeches don’t come to fruition?’”
Travis Fisher, director of environmental and energy policy for the Cato Institute, a libertarian think tank that has criticized anti-data center crackdowns, said he’s never heard of anything like what Ramaswamy is proposing.
Conversely, Fisher has praised a natural gas plant in suburban Columbus built to power a Meta affiliate specifically because it’s off the electrical grid, thus insulating customers from having to pay for any costs of connecting it to the broader power system.
“We’ve never had to bribe people with free electricity to agree to an industrial project. But I guess that just shows where we are in this debate. Which seems like new territory,” Fisher said.
Ramaswamy plan offers simpler alternative to free electricity
Ramaswamy’s plan does offer a potential escape hatch from the complexities of navigating laws and regulations involving a multistate electrical grid.
He wrote that instead of providing extra electricity to nearby homes, data center operators could simply opt to “directly reimburse residential customers within the benefit zone for their electric bills.” In other words, give them money.
Still, analysts and people who work in the energy policy field raised other concerns and questions about Ramaswamy’s plan.
If residents’ electricity is free, what would stop them from wasting electricity to the point that it exceeds what the data center power plant generates?
How would officials decide who’s in and who’s out of the zone that gets free electricity? Would large plants have the same sized benefit zone as a small one?
It’s unclear if data centers will really go along with Ramaswamy plan
The plan creates a big question: Would data center developers agree to pay for free electricity in Ohio when they could simply build in other states?
A spokesperson for the Data Center Coalition, an industry trade group, didn’t return multiple messages for this story.
But a Columbus Republican familiar with the data center industry said AI companies are far more concerned with convincing lawmakers to keep Ohio’s lucrative data center tax break which was worth $2 billion in 2025 alone.
Republican Ohio House Speaker Matt Huffman attempted to eliminate or reduce the tax break earlier this year, but talks stalled after House Republicans couldn’t agree on a plan.
“I don’t think they’re close to the upper limit of what tech companies will pay for,” said the Republican, who spoke on condition of anonymity to discuss private negotiations. “They’ll pay for speed almost to an unlimited standpoint.”
Ramaswamy’s plan notably doesn’t call for eliminating the tax break, while Acton’s says only that tax incentives for data centers must be “reined in.”
David Pomerantz, an environmental advocate who leads the Energy and Policy Institute, said data center developers might be more than happy to underwrite electricity bills if the community benefit zone is narrow enough. He said the result could be communities with data centers could see lower bills while those in other parts of the state would be left behind.
He envisioned a scenario where a data center would provide free electricity generation for 10,000 residents. Paying half of their bills could cost around $12 million annually, at least initially.
“I could imagine the operator of a large data center going for that enthusiastically if it meant they didn’t have to do a whole bunch of other stuff that could have higher value to all Ohio electric ratepayers,” Pomerantz said. “That would be a good deal for the 10,000 people in the benefit zone but a bad one for everyone else.”
Ramaswamy’s plan earns some praise
Some left-leaning analysts praised Ramaswamy’s goal of using the government’s power to extract wealth from some of the world’s richest companies. They also expressed surprise that it would come from a libertarian-leaning Republican.
Mike Jacobs, a senior researcher for the Union of Concerned Scientists, an environmental group, has studied how the data center boom has driven electricity prices upward. He said another part of Ramaswamy’s plan would accomplish this in a more feasible way.
Ramaswamy’s plan also calls for banning local governments from granting property tax abatements to data centers. Then, data centers property tax proceeds would be used to lower tax bills for nearby property owners. Other counties have successfully used data centers to drive down property taxes, including Loudoun County, Virginia, the site of an early data center industry construction boom.
“It’s a pool of money. You can offer people tax subsidies any damn way you please. That’s what lobbying is all about,” Jacobs said.
As for Ramaswamy’s plan to connect private data center power plants to homes, Jacobs described it as “word salad” and a far-fetched attempt to pander to voters.
“I’m all in favor of a progressive wealth transfer. But coming where it’s coming from, it seems like… pick your fantasy, the Easter Bunny,” Jacobs said.
Acton plan far more modest but seen as realistic
There’s nothing eye-popping in Acton’s data center plan when compared to Ramaswamy’s. Her plan is similar to those being tested in other states, with provisions that would require data centers to use union labor, banning the use of non-disclosure agreements for data center projects, setting environmental standards and requiring them to be built on former industrial sites. Projects that don’t comply wouldn’t be approved in what Acton describes as a conditional moratorium. (Ramaswamy’s plan also involves setting environmental standards and limiting where they can be built to industrial sites.)
Experts called Acton’s plan much more realistic, although less ambitious about trying to use data centers to drive down electricity costs. Ramaswamy’s campaign has criticized it as unoriginal and lacking in detail.
One major provision in Ramaswamy’s and Acton’s plan – requiring data centers to cover their own costs – already is a priority for other players in electricity regulation, like PJM, which operates the multistate electrical grid that includes Ohio, and the federal government.
This is important, Jacobs said, because those players’ buy-in is needed to help put the idea into practice.
Jacobs called provisions in Acton’s plan realistic extensions of either governor’s authority over state agencies or existing project agreements.
“Working on a realistic plan has more likelihood of showing change than trying to get agreements and policy reforms around an unrealistic plan,” Jacobs said.
One energy industry lobbyist, who asked to speak anonymously, said Acton’s plan is much easier to implement. That doesn’t necessarily make it smart policy, the lobbyist said, although Republican Texas Gov. Greg Abbott recently announced the data center industry there largely has said it will accept a new package of regulations that overlap with some of what both Ramaswamy and Acton have proposed.
“Implementing a moratorium is easier than doing free electricity,” the lobbyist said. “But you’re signaling that you don’t want investment. And if you’re telling people it’s more expensive to do business here, then you can go somewhere else to do it.”
Jake Zuckerman contributed reporting to this story.
