How to regulate data centers in Illinois at the center of latest proposal
Illinois officials, lobbyists, and industry groups are debating new statewide regulations for data centers amidst growing backlash. Proposals include requirements for closed-loop cooling, data centers to bring their own power, and changes to biometric privacy laws and tax incentives. A task force is meeting to address these issues before the fall legislative session.
A broad consensus is reportedly emerging in Illinois regarding new regulations for data centers, despite a nationwide political backlash against the industry. Marc Poulos, a Springfield labor lobbyist, has circulated a comprehensive three-page proposal that seeks to mandate closed-loop cooling for water conservation, accelerate grid connections for data centers utilizing renewable power, modify certain biometric privacy protections, and reinstate data center tax incentives that Governor JB Pritzker suspended in July.
The Illinois Environmental Council, represented by executive director Jen Walling, generally supports or will not oppose several provisions within Poulos's document. These proposals align with discussions already underway between the governor's office and data center operators, notably including requirements for data centers to secure their own power. These efforts coincide with warnings from the Illinois Commerce Commission and other agencies about potential electricity shortages and price increases by 2030, largely attributed to rising data center demand.
The Data Center Coalition, a Virginia-based lobbying group representing major tech companies like Google, Microsoft, and Meta, is also circulating its own seven-page document in Springfield. The coalition urges Governor Pritzker to restore data center tax incentives, linking their reinstatement to commitments for clean energy, sustainable water usage, and labor agreements. However, the coalition opposes a blanket requirement for data centers to temporarily 'go dark' during peak electricity demand periods, citing the need for continuous operation for many workloads.
Illinois's existing biometric privacy protections, considered among the toughest nationally, are a key point of contention. Brad Tietz of the Data Center Coalition argues these protections deter hyperscaler investments, while attorney Jim Zouras, who has handled numerous privacy lawsuits, maintains that consumer privacy rights are paramount and that new data centers have continued to be built under current laws. Governor Pritzker has defended his earlier suspension of tax incentives, emphasizing the need for data centers to bring their own energy and implement sustainable water practices without compromising affordability or reliability for Illinois residents and businesses.