Chesapeake Utilities to Power New Data Center with Natural Gas

By Michael Kern - Jul 08, 2025,

Chesapeake Utilities Corporation announced Tuesday that its Ohio subsidiary, Aspire Energy Express, LLC, will construct a $10 million intrastate natural gas pipeline in central Ohio to supply a new fuel-cell facility powering a data center. The project, in partnership with American Electric Power (AEP), is set to deliver reliable natural gas by the first half of 2027, addressing the surging energy demands of the data center industry.

The pipeline will support a fuel-cell facility providing on-site electricity to a data center, reflecting a broader trend of utilities adapting to the power-intensive needs of data infrastructure driven by artificial intelligence and cloud computing. The U.S. Energy Information Administration projects U.S. electricity consumption will hit record highs in 2025 and 2026, largely due to data centers, with natural gas playing a key role in meeting this demand despite its declining share in power generation, expected to drop from 42% in 2024 to 40% in 2025.

Chesapeake’s investment aligns with its growth strategy, leveraging its expertise in natural gas transmission to serve high-growth regions. “This project is a clear example of how Chesapeake Utilities continues to execute on our growth strategy by leveraging our core capabilities,” said Jeff Sylvester, senior vice president and chief operating officer. The company, with a market cap of $2.84 billion, reported a 20.34% revenue increase over the past year, driven by strong natural gas demand and infrastructure investments.

AEP, a major utility serving 5.6 million customers across 11 states, is also positioning itself to meet rising commercial load growth, which hit 12.3% in the first quarter of 2025. Its collaboration with Chesapeake underscores efforts to provide innovative power solutions, including low-carbon options like fuel cells, as seen in AEP’s recent 100-megawatt Bloom Energy fuel cell project in Ohio.

The project comes amid concerns about the risks of overbuilding gas infrastructure. Environmental groups, like the Sierra Club, warn that speculative data center demand could lead to stranded assets, burdening ratepayers if projects fail to materialize. AEP Ohio has introduced tariffs requiring data centers to cover most of their projected energy costs to mitigate such risks.

This pipeline, operated by Aspire Energy Express, founded in 2020, adds to Chesapeake’s 2,300 miles of natural gas pipelines across 40 Ohio counties. As data centers reshape energy landscapes, this initiative highlights the critical role of natural gas in balancing reliability and growth, even as utilities navigate a complex transition toward cleaner energy sources.

By Michael Kern for Oilprice.com