Illinois POWER Act data center regulation won’t move forward this spring
The Illinois POWER Act, a bill proposing significant regulations for data centers on issues like water use, energy sourcing, and community benefits, has stalled and will not pass this legislative session. Sponsors and advocates are calling for continued negotiations and a suspension of state tax credits for data centers. The bill aims to address concerns about data centers' impact on utility bills, water resources, and communities across Illinois.
The Illinois POWER Act, a significant bill aimed at regulating data centers across the state, will not pass during the current legislative session, missing the May 31 deadline. The proposed legislation sought to implement guardrails requiring data centers to report water usage, secure community benefits agreements, and pay for their own renewable energy sources. This delay means pending data center projects will not immediately face these new regulations.
Rep. Carol Ammons, D-Urbana, chair of the House Energy and Environment Committee and a bill sponsor, indicated that further subject matter hearings are necessary to engage additional stakeholders. Lawmakers anticipate continued negotiations over the summer, with the possibility of the bill being reconsidered during the fall veto session.
In light of the bill's stalled progress, advocates and some lawmakers are pushing for an alternative measure: a suspension of the state's data center tax credits. House Majority Leader Robyn Gabel, D-Evanston, and Gov. JB Pritzker have both called for pausing these incentives, which have totaled nearly $1 billion since 2019, arguing against providing tax breaks to highly profitable corporations that strain public resources. The Illinois Clean Jobs Coalition, representing various environmental groups, has urged legislative leaders to convene a negotiating table by the end of June to advance the POWER Act.
Concerns raised during legislative hearings included the massive energy demand, risks to water sources, and local community impacts posed by data centers. While advocates emphasized the necessity of statewide standards for transparency and accountability, some stakeholders warned that overly strict regulations could lead developers to bypass Illinois, costing communities potential tax benefits. Sen. Ram Villivalam, D-Chicago, who is leading the bill in the Senate, highlighted the POWER Act as the "most comprehensive data center legislation in the nation" designed to protect ratepayers, communities, and natural resources.