Crain’s Cleveland Business first published this opinion piece.

America’s 21st century economy runs on electricity. And its aging electric power grid is struggling to keep pace.

Demand for megawatts continues to rise as companies invest billions of dollars in artificial intelligence, large digital data centers, robotics research, advanced manufacturing and supercomputers. All of those industries will continue to grow for the foreseeable future, and all will require massive amounts of reliable, affordable electricity.

With a strong traditional and advanced manufacturing sector and an emerging data hub, Ohio straddles the old and new economies and draws more power than most states. PJM (the regional energy supplier) provides much of the state’s electricity and expects regional energy demand to grow by nearly 5% annually — much of it driven by high-tech data centers.

Last year, Ohio enacted House Bill 15, which incentivizes new power plant production and encourages data centers to build “behind-the-meter” power plants that send electricity directly to the power-hungry businesses rather than the central grid, bypassing PJM’s logjam of connection requests.

Ohio also now wisely requires its energy regulators to rule on power plant construction applications within six months. And for priority investment areas and behind-the-meter projects, approval must be given or denied within weeks.

Finally, Ohio also reduced its tangible personal property tax on new power-generation, electricity transmission lines and energy pipelines. These taxes affect key business assets such as machinery, inventory and equipment. And they hit the energy sector especially hard because of all the taxable industrial property that energy firms own.

Faster approval timelines, lower taxes and a more predictable regulatory environment mean more energy construction and a more attractive place for data centers and other high-energy consumers to do business because companies can recoup their large investments faster.

Ohio already is seeing the results. Companies quickly announced multiple behind-the-meter projects and have invested more than $4 billion in new plants for data centers. Before House Bill 15, Ohio had one behind-the-meter generator serving Ohio State University with 100 megawatts. Since enacting the legislation, the state has approved several behind-the-meter plants with 2,000-megawatt capacity.

To build on these successes, Ohio should focus on reducing electricity transmission and distribution costs that account for about half of a residential electric bill — bills that were already rising even before the recent data center surge. Permitting reforms, greater transparency and oversight, and policies that fast-project approvals in high-congestion areas and allow more companies to bid competitively on transmission projects should all be explored as viable ways to lower prices.

The cheapest way to increase transmission capacity is to maximize existing transmission infrastructure. Grid-enhancing technologies such as dynamic line rating, advanced conductors, and advanced power flow control can squeeze more capacity out of existing lines before new wire gets built.

Dynamic line rating sensors alone can increase a line’s carrying capacity by 10% to 30% at less than one-twentieth the cost of new construction. House Bill 15 already requires utilities to evaluate these technologies before expanding transmission infrastructure; policymakers should ensure that requirement is enforced

House Bill 15 required increased transparency on energy grid constraints, but more accurate electricity demand forecasts can justify expanding transmission infrastructure. And stronger oversight of local transmission spending by PUCO would give ratepayers the transparency they need to understand their bills and the tools to challenge unfair charges.

The status quo has been unsustainable. But allowing behind-the-meter electric generators for high-consumption industries, greenlighting faster regulatory approvals and offering responsible tax incentives have already spurred investment and produced more energy.

Ohio policymakers now need to pursue reforms that will reduce transmission costs by encouraging competition, streamlining the permitting process and making the energy grid more transparent for consumers and regulators. Good reforms lead to good results. And those results should include affordable, abundant energy for every Ohio home and business.

Rea S. Hederman Jr. is vice president of policy at The Buckeye Institute.