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Olentangy warns of rising electricity costs tied to data‑center capacity charges; district highlights energy savings since levy
Summary
Energy staff told the Olentangy board on March 13 that rising capacity charges tied to regional data‑center growth are likely to push the district’s electric costs up this year — staff estimated an overall electric increase of about 27% driven by wholesale and capacity changes.
Olentangy Local School District energy management staff told the board March 13 that the district expects a substantial increase in electric costs this year driven primarily by higher capacity charges in the wholesale electricity market.
Energy staff illustrated a regional load forecast that showed growing summer peaks attributable in part to nearby data‑center growth. Those peaks increase the “capacity” component of electricity bills — a revenue stream paid to generators to expand or build generation to meet peak demand. Energy Manager Mister Gordon said that capacity‑charge increases and the district’s recent performance on peak days combined to produce an estimated $334,000 increase on the capacity side in the most recent comparison; the administration said wholesale and capacity changes together were forecast to raise the district’s electric costs by about 27% for the year.
Gordon explained how capacity charges are calculated: regional auctions set a clearing price; each customer’s peak‑day contribution (measured over the five highest demand days) determines the customer’s share. He said the district tries to limit exposure on those highest days — for example, by modifying building schedules during summer peak alerts — but that last year one of the five highest demand days occurred after school had started, when athletic events and building activity limited the district’s ability to throttle energy use.
The district also said it hedges gas and participates in a purchasing consortium (described as MEC/Meta by staff) and that the wholesale contract pricing has varied: a recent hypothetical purchase rate cited in the presentation was 5.7¢/kWh compared with a prior three‑year locked price near 3.2¢/kWh. Staff noted that without hedging the current market would be higher.
Gordon highlighted positive performance metrics, citing Energy Star scores: Heritage Elementary was performing better than 96% of comparable school buildings in Energy Star, and the district average was above 92%. He said the district’s energy program had achieved about $25.8 million in “total avoidance” since the last levy by reducing consumption relative to earlier baselines.
Board members thanked operations staff and emphasized that district energy decisions must not degrade the student day; Gordon said staff will not intentionally impact instruction or student activities to reduce electric peaks.
Ending: District staff said they will continue to monitor wholesale and capacity markets, work with the consortium for hedging strategies and pursue building‑level controls to limit peak‑day exposure; administrators asked to return with updates if additional mitigation steps are recommended.
