I&M, Google Filing to Support Reliability Through Demand Response Structure

Rhea-AI Summary

American Electric Power (NASDAQ: AEP) subsidiary Indiana Michigan Power (I&M) has filed a special joint contract with Google for a custom Demand Response structure to support capacity needs through clean generation. The agreement, filed with the Indiana Utilities Regulatory Commission on July 30, will enable Google to reduce or shift electricity demand during peak hours at its upcoming $2 billion Fort Wayne data center.

The partnership aims to manage electricity demand during peak times, potentially lowering overall energy costs for all I&M customers. Google's data center, announced in April 2024, represents one of Indiana's largest economic development projects. I&M currently serves over 600,000 customers with a diverse generation portfolio including 2,278 MW of nuclear, 450 MW of wind, and other renewable sources, with over 85% of energy delivered in 2023 being emission-free.

Positive

• None.

Negative

• Requires regulatory approval from IURC before implementation
• Additional strain on existing power infrastructure from new data center operations

Insights

Utility Infrastructure Analyst

I&M's partnership with Google creates innovative demand response capabilities, reducing grid infrastructure needs while supporting major economic development.

This joint contract between I&M and Google represents a strategic innovation in utility load management. By implementing a custom demand response structure with Google's new $2 billion Fort Wayne data center, I&M gains access to a significant flexible load resource that can be dispatched during peak demand periods—essentially functioning as a virtual power plant.

The arrangement allows Google to shift non-critical computing workloads to off-peak hours, creating system-wide benefits: reduced peak capacity requirements, more efficient utilization of existing generation assets, and potentially delayed capital expenditures for new power plants. This is increasingly important as I&M's service territory experiences "significant economic growth" according to the filing.

The timing is particularly relevant as data centers represent one of the fastest-growing electricity demand segments nationwide due to AI development. With 85% of I&M's 2023 energy delivery already emission-free, this partnership aligns with both companies' sustainability objectives while addressing practical grid management challenges.

For AEP shareholders, this agreement offers several advantages. First, it enables accommodating major load growth without proportionate infrastructure investment. Second, it demonstrates innovative load management strategies that regulators increasingly favor. The pending approval from the Indiana Utilities Regulatory Commission will be a key milestone to watch, though the mutual benefits suggest a favorable regulatory view is likely.

This partnership establishes a potential template for how utilities can collaborate with technology companies to address the dual challenges of rapidly growing electricity consumption and grid constraints while maintaining reliability for all customers.

Data Center Technology Specialist

Google's flexible AI workload management demonstrates how data centers can evolve from power consumers to grid stability partners.

Google's participation in this custom demand response program represents a significant evolution in data center operational philosophy. Rather than simply consuming electricity as a passive customer, Google is integrating its $2 billion Fort Wayne facility into the grid as an active management partner through sophisticated load flexibility.

The agreement acknowledges a critical reality in modern computing: not all AI and data processing tasks require immediate execution. By categorizing workloads as time-sensitive or deferrable, Google can shift substantial computing demand to periods when electricity is more abundant and less expensive—maintaining performance for critical operations while reducing grid stress during peak periods.

Amanda Peterson Corio, Google's Global Head of Data Center Energy, frames this capability as "a vital tool for enabling responsible data center growth" particularly in regions with constrained power resources. This approach is increasingly important as AI growth accelerates power demands from computing infrastructure nationwide.

The technical implementation likely involves sophisticated workload scheduling algorithms that prioritize computing tasks based on both urgency and grid conditions. This represents advanced integration between utility signals and data center operations that few companies have achieved at scale.

For the broader tech industry, this partnership demonstrates how intelligent load management can enable continued technological advancement while minimizing infrastructure demands. As data centers become larger electricity consumers, this model of "good grid citizenship" may become an industry standard expectation rather than a differentiator.

FORT WAYNE, Ind., Aug. 4, 2025 /PRNewswire/ -- Indiana Michigan Power (I&M), an American Electric Power (Nasdaq: AEP) company, recently filed a special, joint contract with Google, designed to support I&M's capacity needs through clean generation and use of a Demand Response structure. This special contract, which is the result of collaborative efforts between the two organizations, further supports I&M's ability to provide reliable and affordable service for all customers as communities continue to experience significant economic growth.

The contract filed with the Indiana Utilities Regulatory Commission (IURC) on July 30 outlines a custom Demand Response structure, aligning with Google's operating capabilities. By participating in this program, Google will leverage new capabilities that allow it to reduce or shift electricity demand to carry out non-urgent tasks during hours when the electric grid is under less stress.

This offering will be used to reduce I&M's peak load in times of high energy demand, similar to programs currently available to residential and commercial/industrial customers. As a large load customer, Google's participation in this program boosts Indiana Michigan Power's ability to manage electricity demand during peak times. This helps lower overall energy costs, delivering savings to all I&M customers. 

"I&M is excited to partner with Google to enable demand response capabilities at their new data center in Fort Wayne, IN. As we add new large loads to our system, it is critical that we partner with our customers to effectively manage the generation and transmission resources necessary to serve them. Google's ability to leverage load flexibility will be a highly valuable tool to meet their future energy needs," said Steve Baker, president and chief operating officer of I&M. 

Weather serves as a primary contributor for changing energy demand throughout the year. As energy usage increases, so does the need to balance the demand on the power grid. Demand Response programs target the reduction or shift in energy used by customers out of the peak timeframe. Typically, peak hours, or the time of day when energy use is the highest, are most common on weekdays during the late afternoon and evening timeframe.

"As AI growth accelerates, we recognize the need to expand our demand response toolkit and develop capabilities specifically for machine learning workloads. Working closely with I&M to include load flexibility as part of the overall supply plan, we can support future power needs even where power generation and transmission are constrained. We want to be thoughtful about how we can continue to be a good grid citizen and see this as a vital tool for enabling responsible data center growth," said Amanda Peterson Corio, Global Head of Data Center Energy, Google.

The contract represents a significant commitment by Google to support sustainability and affordability of I&M's electric service, while reducing operational impacts it may have on peak energy needs. If approved by the IURC, this agreement will reduce I&M's long-term generation requirements and financial commitments to benefit all I&M customers.

Google announced plans to build a $2 billion data center in Fort Wayne in April 2024. This investment is among the largest economic development projects in the state of Indiana, bringing significant benefits to local communities.

Indiana Michigan Power (I&M) is headquartered in Fort Wayne, and its approximately 2,000 employees serve more than 600,000 customers. More than 85% of its energy delivered in 2023 was emission-free. I&M has at its availability various sources of generation including 2,278 MW of nuclear generation in Michigan, 450 MW of purchased wind generation from Indiana, more than 22 MW of hydro generation in both states and approximately 35 MW of large-scale solar generation in both states. The company's generation portfolio also includes 1,497 MW of coal fueled generation.

About American Electric Power (AEP)
Our team at American Electric Power is committed to improving our customers' lives with reliable, affordable power. We are investing $54 billion from 2025 through 2029 to enhance service for customers and support the growing energy needs of our communities. Our nearly 16,000 employees operate and maintain the nation's largest electric transmission system with 40,000 line miles, along with more than 225,000 miles of distribution lines to deliver energy to 5.6 million customers in 11 states. AEP also is one of the nation's largest electricity producers with approximately 29,000 megawatts of diverse generating capacity. We are focused on safety and operational excellence, creating value for our stakeholders and bringing opportunity to our service territory through economic development and community engagement. Our family of companies includes AEP Ohio, AEP Texas, Appalachian Power (in Virginia, West Virginia and Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana, east Texas and the Texas Panhandle). AEP also owns AEP Energy, which provides innovative competitive energy solutions nationwide. AEP is headquartered in Columbus, Ohio. For more information, visit aep.com.

News releases and other information about I&M are available at IndianaMichiganPower.com.

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/im-google-filing-to-support-reliability-through-demand-response-structure-302520729.html

SOURCE American Electric Power

FAQ

What is the value of Google's new data center investment in Fort Wayne announced by AEP?

Google is investing $2 billion to build a new data center in Fort Wayne, Indiana, announced in April 2024, representing one of the largest economic development projects in the state.

How will AEP's demand response agreement with Google benefit customers?

The agreement will help I&M manage electricity demand during peak times by allowing Google to shift non-urgent tasks to off-peak hours, potentially lowering overall energy costs for all I&M customers.

What percentage of Indiana Michigan Power's energy delivery was emission-free in 2023?

More than 85% of I&M's energy delivered in 2023 was emission-free, supported by its diverse generation portfolio including nuclear, wind, hydro, and solar power.

What is I&M's current generation capacity from different sources?

I&M's generation portfolio includes 2,278 MW of nuclear generation, 450 MW of purchased wind generation, 22 MW of hydro generation, 35 MW of large-scale solar, and 1,497 MW of coal-fueled generation.

When did AEP file the demand response contract with Google?

Indiana Michigan Power filed the special joint contract with the Indiana Utilities Regulatory Commission (IURC) on July 30, 2025.