The Illinois Clean Jobs Coalition, an environmental umbrella group, said data center operators need to be transparent about what the public gets out of big installations, releasing polling data showing 70% of Illinois residents support tighter regulation of the industry embodied in the Protecting Our Water, Energy, and Ratepayers Act, or POWER Act.
The coalition said the number rises to 75% after provisions are explained. The survey results are intended to persuade lawmakers who might be on the fence to vote for the proposal as negotiations have yet to move much beyond committee hearing testimony.
State Rep. and House Majority Leader Robyn Gabel of Evanston is sponsor the bill in the House. She said at a news conference the measure [SB4016/HB5513] would require sunshine on community benefit agreements, the contracts that determine what local governmental bodies give and get by bringing in a data center.
Gabel said the mayor of DeKalb recently refused to disclose what that city received in a data center deal and doubled down in a legislative committee hearing.
"He supported continuing just being able to make these backroom deals without letting the public know what they are," said Gabel.
Christine Nannicelli of the Sierra Club said secrecy prevents other elected officials from deciding whether a proposal is truly in the public interest as a Central Illinois officeholder found out.
"He had to vote on the project. He serves on the Sangamon County Board. He did not get a chance to see the community benefits agreement. We're seeing these processes move forward without folks having a real seat at the table," said Nannicelli.
Gabel called the provisions "common sense guard rails. The POWER Act will ensure working people aren’t left footing the bill for data centers.”
Senate sponsor Ram Villivalam of the northwest suburbs acknowledged the state does not want to choke off economic development, employment, and revenue that data centers can bring. He said the issues are “complicated,” and include high demand for electricity in a tight marketplace. He wants to prevent cost shifting onto other ratepayers.
“Help us pay for it, help us bring your own energy. That is another simple concept that we’re trying to make sure doesn’t have a detrimental impact on our residents,” said Villivalam.
Data centers also often use substantial amounts of water for cooling. Villivalam said water is the most valuable resource in the state.
“Making sure there are water efficiency standards, water re-use, making sure ... through all of these policies that we are doing right by the generations to come,” he said.
The proposal would force data centers to disclose water use, assess cooling alternatives, and mandate high-efficiency systems. It would require the Illinois State Water Survey to review applications as a layer of protection for drinking water.
The proposal also would create an industry funded public benefits and affordability fund to support energy bill assistance, home efficiency upgrades, and air quality monitoring.
Republican proposal
There’s also Republican-sponsored legislation on the issue.
State Sen. Chapin Rose of Mahomet introduced a measure [SB4004] that would bar data centers from using water from the Mahomet Aquifer. It would require existing data centers to transition to a different water source than the aquifer, bar nondisclosure provisions for community benefit agreements, water use, and power consumption. Rose’s bill places review responsibility and rule making under the Illinois Environmental Protection Agency.
Rising concerns over power and water use by data centers prompted Gov. JB Pritzker to use part of his State of the State speech in February to issue a call for a two-year pause on new tax credits for data centers. During a Feb. 26 stop in Bloomington, Pritzker said data centers have a much higher impact on the energy grid than other manufacturers that receive such incentives.
"That's why we want to maybe just pause and make sure we are doing everything we can to add electricity to the grid before we start thinking about adding new data centers," said Pritzker.
Illinois already has more than 100 data centers, according to an industry map. Two are in Bloomington, one downtown, and the other near the Central Illinois Regional Airport. Others are in Rantoul, Urbana, and Peoria.
Amid the pushback, they remain attractive to some as economic development engines that facilitate the internet and AI. In the absence of state legislation, Logan County has proposed an ordinance to regulate pollution from the centers.
Logan County Board member Michael DeRoss, chair of the board's zoning and economic development committee, said last month the centers can come with benefits like jobs, along with the negatives.
"There is increase in revenue for the governmental functions. The amount of money that farmland pays in taxes will be dwarfed by what a data center would pay," he said.
Logan County is in talks with data center companies, but there is currently no formal proposal. Meanwhile, the Village of Pekin recently squashed a proposal for a large data center.
Opponents of the POWER Act, such as the industry group Data Center Coalition and the Illinois Manufacturers Association, have suggested the proposal is too restrictive and would choke off data center investment in the state.
Data industry perspective
Brad Tietz, director of state policy for the Data Center Coalition, said the economic impact is undeniable.
In Illinois, Tietz said Illinois data showed the industry supported about 115,000 jobs and added about $20 billion to the Illinois GDP in 2023. Tietz said data center companies also paid $1.8 billion in state and local property taxes that year.
“And for every one job in the data center industry directly, we generate about six jobs elsewhere in the economy, when you think about supply chain firms, manufacturing companies, construction companies,” said Tietz.
He said the state Department of Commerce and Economic Opportunity reported the state incentive program resulted in more than $15 billion in investment in the state in 2024.
Illinois was in the top five states as a market for data centers from 2019-2024, said Tietz, adding that has dropped for several reasons to eighth or ninth. He said Bloom Energy estimated that by 2028 Illinois will lose a quarter of its market share in data center development, even before the pause and the regulatory debate.
“When you layer on increasingly complicated environments, and you throw on a pause in the incentive, you throw in discussions around the POWER Act and things like that in Springfield, many companies will simply take those benefits elsewhere," he said.
If the POWER Act passes, Tietz said it would make it difficult to get data center projects off the ground in Illinois.
Last week, there were committee hearings on local impacts. The Senate held a lengthy hearing on related subject matters, and the House will hold its second hearing this week. Tietz said water is next week. He said there have been stakeholder conversations, but not official talks.
“We were always of the belief that there was going to be a working group process established for data centers to be talked about this session, and that has not yet occurred,” said Tietz. "Nothing has really kicked off from a negotiating perspective yet.”
Water use
He said data centers actually use less water than many industries do, so his industry would like to talk about ways for the state to solve its larger needs for water across a number of industries.
For instance, he said there are places where gray water is used for cooling. That’s water that has passed through the sewage treatment process and is ready to be released into the environment, but is not treated enough to make it suitable for human consumption.
“It's being looked at more and more,” said Tietz. “Other technologies as well, and these technologies are evolving by the day. ... Don't mandate one. Maybe try to figure out what kind of metrics you are going to use and work from there.”
Tietz was cautious about proposed sunshine requirements for community benefits agreements, saying "I don't think a statewide mandate is going to address some of the concerns the environmental community is raising, but it's certainly something that we're willing and able to have conversations with.”
He also noted the data center industry is not a monolith. Older projects begun decades ago tend to be much smaller than ones sometimes proposed today.
He cautioned against tying data centers to the sometimes-controversial developing AI technology, or painting with too broad a brush on any part of the industry.
He said “25% of the workloads occurring right now in data centers are AI-related. About 55% is Cloud, and the rest is for traditional or legacy storage practices. It's a complicated conversation, and I think it's one we'd like to have. …Our members would like the certainty in a state like Illinois to know what the rules of the game are.”
And he suggested if there is not buy-in from local communities to begin with, any project is not going to be successful in the long run.
As is common in the General Assembly, when serious negotiations over the provisions of the bills eventually do begin, they can last almost until the very end of the spring session.
