Advocates, accusing governor of ‘lack of engagement,’ urge passage of data center regulations by end of May

SPRINGFIELD — Environmental advocates continue to pressure lawmakers to require more transparency about data centers’ water and energy use as the legislative session creeps toward the finish line.

The POWER Act is the primary vehicle for regulations that address concerns about the effects data centers have on communities, but it hasn’t seen any action beyond subject matter hearings since it was introduced in February.

With less than three weeks left before lawmakers are slated to adjourn, however, it’s unclear whether the wide-ranging bill will come together and whether Gov. JB Pritzker will throw his support behind any specific regulatory proposal.

“We are confused and concerned by the Governor’s lack of engagement on the issue of data centers this spring legislative session,” Kady McFadden, lead lobbyist on behalf of the Illinois Clean Jobs Coalition that has been behind several recent energy reforms, said in a statement.

Pritzker mentioned data centers in his February State of the State address, calling for PJM Interconnection, the electric grid operator that covers all or part 13 states from Illinois to the East Coast, to require data center developers to pay for and provide their own energy.

He also proposed a two-year pause on state tax credits for new data centers to compensate for rising demand and higher prices. Illinois has provided tax incentives for data centers since Pritzker signed bipartisan legislation in 2019. According to the state’s 2024 report, at least 27 data centers had received incentives totaling $983 million in estimated lifetime tax breaks and benefits.

But the advocates behind the bill say he’s been silent since, even as a vast array of stakeholders indicate they have at least some interest in regulation.

“The Governor’s Office continues to monitor and take note of all legislation that requires additional state resources,” a spokesperson said in an emailed statement. “As bills make their way to the second chamber, agencies and Governor’s Office staff will continue to educate members and budgeteers about the fiscal impact of bills.”

It’s not uncommon, however, for lawmakers to wait until the last minute to pass major legislation, including energy policy.

“Illinois has the opportunity to set real guardrails before even more projects move forward,” said Tyshianna Bankhead, executive director of Faith Coalition for the Common Good based in Springfield, at a House committee meeting on Tuesday.

The urgency comes from the increased interest of data centers to develop in Illinois. A representative from Commonwealth Edison said the northern Illinois territory has almost 100 large-load projects in the queue. Since February, data center proposals have been approved in Sangamon County, Joliet and Yorkville.

“This is not something that we can solve one community at a time,” Jen Walling, executive director of the Illinois Environmental Council, said at a Wednesday news conference. “This is a statewide issue, and it demands a statewide solution.”

Bipartisan support for regulation?

Advocates say they don’t know why the bill has stalled, because Democrats and Republicans have aired concerns about water use, energy prices and the lack of transparency around proposed developments. As with all legislation with the scope of the POWER Act, however, the devil is in the details.

Walling pointed toward a Republican representative’s bill to regulate data centers and said she was encouraged by the conversation that happened in the Tuesday committee.

“I think that that hearing just showed a large level of support for moving forward and doing something, and how interested people are and how much all lawmakers are hearing from their constituents,” Walling said.

Rep. Jed Davis, R-Yorkville, filed House Bill 5755 on April 27, which would require municipalities to provide public notice and hearings for proposed data centers. It would also allow residents to gather signatures to trigger a referendum vote on proposed projects.

He said the bill was inspired by constituents who felt Yorkville didn’t listen to them before approving several data center projects.

“I’m really hearing the voice of my constituents back home and how they feel silenced,” he said. “And, through this piece of legislation, I’m trying to give them fresh breath, give them a voice again, to empower them to have change locally.”

Davis told Capitol News Illinois he’s “right on the fence” as to whether he’d vote for the POWER Act, and he’s heard similar from some of his Republican colleagues. He said constituents have emailed him since “day one,” asking him to support the POWER Act.

Republicans have called for regulations on data centers, but they don’t want restrictions to interfere with data centers’ economic benefits and many dislike the requirement that new data centers get their energy from renewable sources.

What would the POWER Act do

Despite several recent committee hearings on data centers, lawmakers this week commented on how the bill feels like it’s still in its early stages. Many members of the House Energy and Environment Committee said Tuesday they were learning details about the bill for the first time.

“Clearly, there’s a lot of conversation that needs to happen around the bill,” said Rep. Carol Ammons, chair of the committee. “I’ll just put on the record that my major concern and protection area will certainly be the Mahomet (Aquifer), which is sole source, and utilization of water is a huge, huge problem in the either existing data centers or those coming online.”

The POWER Act would prohibit nondisclosure agreements between governmental units and data centers and would require data center developers to create community benefits agreements in the places they’re located.

It would also require public water-use reports, environmental impact assessments, and would make data center developers build their own renewable energy generation to power the facilities.

The bill is meant to address concerns about the millions of gallons of water data centers can use and the power strain they’ll put on an already struggling grid.

The ComEd territory in northern Illinois, for example, has enough large-load energy projects in its queue to more than double the amount of energy demand in the territory by 2040.

Even the data center industry has indicated its open to regulation — at least nominally.

Brad Tietz, the Midwest policy director for the Data Center Coalition, acknowledged that data centers have impacts on communities but said data center companies can be useful too, especially as technology for water and energy use evolve.

“We’ve been asking throughout the session now for formal stakeholder negotiations to begin,” he said. “While we do have concerns with the POWER Act, a number of the issues are not insurmountable, and we’d love a chance to talk through this.”

Tietz said the data center industry would like to change proposals requiring data centers to provide their own renewable energy and water use reports to make them voluntary instead of mandatory — a proposition that’s unacceptable to environmental advocates.

Similarly, Joe Duffy with Climate Jobs Illinois, said his organization supports the goals of the POWER Act and is open to negotiating with other stakeholders, but it has concerns about whether the renewable generation projects required in the bill will be held to union labor standards.

Climate Jobs Illinois also opposes a pause on the data center tax credit.

“Without it, there’s no guarantee that these projects benefit Illinois workers or Illinois communities,” Duffy said.

McFadden said the Clean Jobs Coalition has spoken with labor interests about the bill, but they have not been able to sit down with the Data Center Coalition.

Calls for transparency

Across Illinois, proposed data centers have drawn hundreds of Illinoisans to city council meetings and town halls demanding more information about how data centers will impact their communities. Many have called out the frequent use of nondisclosure agreements between data center companies and municipalities and limited time for public input.

In some cases, like in Naperville and Pekin, the outcry has been able to halt projects, but several communities have moved ahead despite opposition from residents.

“When it comes to data centers, communities are struggling to get basic information, let alone meaningful involvement,” Bankhead said at a House committee meeting on Tuesday.

The Sangamon County Board approved a data center in April on a 17-10 vote after limited public comment. Bankhead said the board did not openly discuss the project.

“Information was difficult to access, and decisions seemed to move faster than the public process should, and many residents were left feeling like they were reacting to the process instead of being included,” she continued.

Joliet residents voiced similar concerns about the Joliet Technology Center, a planned 795-acre data center project that was approved in March on an 8-1 vote.

“City officials were quiet or contemptuous, information was inconsistent and delayed, and technical analyses were either incomplete or unavailable to the public,” Noah Martinez, a member of Joliet Residents for Responsible Growth, said at a Monday news conference in Joliet.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.