Illinois lawmakers consider new rules for data centers

Environmental advocates are pressuring Illinois lawmakers to pass the POWER Act, a bill aimed at increasing transparency and regulating data centers' significant water and energy consumption. The legislation, introduced in February, has seen little action despite widespread stakeholder interest and an approaching legislative session deadline. Governor JB Pritzker has called for a pause on state tax credits for new data centers due to rising demand and prices but has remained notably silent on his support for the POWER Act, causing "confusion and concern" among groups like the Illinois Clean Jobs Coalition. The urgency for statewide regulation stems from a surge in data center development across Illinois, with nearly 100 large-load projects in northern Illinois' ComEd territory alone. Recent approvals in Sangamon County, Joliet, and Yorkville, coupled with a canceled project in Pekin, highlight a lack of transparency and public input, leading to frustration among community members. Representative Jed Davis, R-Yorkville, has filed a separate bill, House Bill 5755, which would require public notice and hearings for proposed data centers and allow residents to initiate referendum votes on projects, directly addressing constituents' feelings of being "silenced" by local decisions. The POWER Act's key provisions include prohibiting nondisclosure agreements between developers and government units, mandating community benefits agreements, requiring public water-use reports and environmental impact assessments, and compelling data center developers to build their own renewable energy generation. While the data center industry, represented by the Data Center Coalition, has expressed openness to regulation, they advocate for voluntary rather than mandatory renewable energy and water reporting. Labor organizations, like Climate Jobs Illinois, support the Act's goals but seek assurances for union labor standards and oppose the proposed tax credit pause. The bill faces an uphill battle to secure passage before the session concludes, with lawmakers noting it still feels to be in early stages of discussion.