Data Centers Are Popping Up Everywhere In Chicago. Here's Where — And Why They're Controversial
Chicago is rapidly becoming a major hub for data center development, but this growth is sparking controversy due to concerns over high electricity and water consumption, noise, and tax incentives. Mayor Brandon Johnson has issued an executive order imposing new rules and reviews on data centers, while the state of Illinois is also considering regulations and recently paused tax incentives. Opposition is forming against some proposed projects.
Chicago and its suburbs are experiencing a significant boom in data center development, positioning the region as the fourth-largest market in the US. However, this growth has ignited controversy due to the data centers' substantial demands on electricity and water, perceived tax breaks, noise pollution, and limited job creation once operational. The city currently hosts 39 data centers, with Cook County having 109 and 12 more planned, including large facilities from companies like Related Digital, Metro Edge, Legacy Investing, and HydraVault.
The article highlights Chicago's appeal due to cheaper commercial power rates from ComEd, a cooler climate allowing for 'free cooling,' and access to abundant Great Lakes water, which is less costly than in other regions. Despite these advantages, concerns are rising about the strain on the electric grid and water infrastructure. Data centers currently account for 7.2 percent of Illinois' energy consumption, projected to rise to 37.3 percent by 2040, potentially leading to higher utility bills for all customers.
In response, Governor JB Pritzker announced a pause on new state tax incentives for data centers, effective July 1. Separately, the Illinois Commerce Commission approved a change allowing ComEd to recover costs for large-load projects only if they proceed as planned. Chicago Mayor Brandon Johnson signed an executive order implementing new rules and reviews for data centers, including enhanced evaluations for air pollution and noise regulations. His administration is also advocating for a city-wide moratorium on new data center developments, which would require City Council approval. Opposition is emerging against projects, such as a proposed data center adjacent to a quantum computing development on the former U.S. Steel South Works site.