Amazon's three data centers in central Ohio would get a big discount on their electricity bills under an unusual new proposal that could pave the way for up to a dozen more Amazon data centers in the region.

The plan was filed late Friday afternoon with the Public Utilities Commission of Ohio and was signed by an Amazon subsidiary and its electricity utility, American Electric Power.

The public version of the filing provides no information about the dollar value of the discount or how the discount would change as Amazon added data centers. Key figures are blacked out in the public version, a move deemed necessary to protect trade secrets.

Amazon has data centers in Dublin, Hilliard and New Albany that represent an investment of more than $1 billion. The centers are used by Amazon Web Services to provide data storage and capacity to Amazon and other companies.

"Applicant is poised for potential additional development in Ohio," the application says. "Each Ohio campus has current capacity to grow fivefold, with each able to support four similar-sized data centers for a combined potential of 15 data centers on the three Ohio campuses" as demand grows for Amazon Web Services' resources.

This indicates that any new data centers would be added in the three communities that already have data centers. Such an expansion would be a coup for state and local leaders, who are vying with other states and countries to attract Amazon's spending.

Key elements of the proposal:

• Vadata Inc., the Amazon Web Services subsidiary that operates the data centers, would not have to pay the full cost of 12 special charges, or riders, that other businesses typically do. That leaves eight riders that the company would pay at normal levels.

• The company would pay base rates for electricity delivery and some of the special charges, but with a discount. The percentage discount — with figures not disclosed — would increase as Amazon builds more data centers in AEP territory.

• Amazon also would have a undisclosed cap on the amount of its electricity use that would be subject to certain charges.

• The agreement would be in effect for 10 years.

The discounts would be substantial, considering that data centers are major electricity users. However, Amazon and AEP say that no costs directly related to the proposal would be passed on to other customers.

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While there would be no special charge, the Amazon discount would reduce the sums going to AEP and various AEP programs compared with what would be the case for a similar customer paying regular rates. Indirectly, this means that other customers would be paying more than they would have otherwise.

Amazon Web Services did not respond to a request for comment.

Among the riders Amazon would not have to pay in full are:

• The Universal Service Fund, which covers the cost of assistance to low-income customers.

• The Power Purchase Agreement rider, which is part of a profit guarantee for AEP's share of Ohio Valley Electric Corp., a company that owns two coal-fired power plants.

Amazon and AEP say the data centers will help the state and local economy.

"The proposed arrangement will support substantial new, energy-efficient electrical (use) while encouraging significant investments in new good-paying jobs and state-of-the art data center facilities in Ohio," they said in the application.

The plan includes a commitment for creating just 25 jobs in three years. Data centers have high construction and operational costs and are a boon to the local tax base, but they tend to have few employees.

Ohio Gov. John Kasich and economic-development officials have made it a priority to attract data centers. The region is attractive for data centers because of its low risk of natural disasters and access to a reliable electricity supply, officials have said.

The applications cite two Ohio laws that give the PUCO the authority to approve special electricity arrangements to attract or retain key employers. Several other businesses in AEP territory receive special rates, although the structure of the Amazon proposal does not have an apparent precedent locally. Columbus-based AEP serves 5.4 million customers in 11 states.

The PUCO panel will review the evidence and give other parties the opportunity to comment before approving, rejecting or revising the proposal. The case number is 17-1827.

One free-market advocate bristled at the special treatment being offered Amazon.

"If we think the cost of energy is so high that we need to have a special arrangement for one business, the question should be, 'Why should any business have to pay high energy costs?'" said Greg Lawson, a research fellow at the Buckeye Institute, a conservative research group.

Lawson was still reviewing the plan Tuesday, but he said the underlying idea raises many concerns about the fairness of the system.

On the other side of the issue, the application includes a recommendation of the plan in a letter signed by economic-development directors in Dublin, Hilliard and New Albany.

"Ohio should not miss this opportunity to expand its partnership with Vadata and its ultimate parent company, Amazon.com," the letter said.

dgearino@dispatch.com

@dangearino