POWER Act data center regulation didn’t move forward this spring
The Illinois POWER Act, a bill proposing various regulations for data centers, did not advance by the General Assembly's May 31 deadline. Its sponsors and advocates are pushing for continued negotiations over the summer and a potential vote in the fall, while also calling for a pause on state data center tax credits. The bill aims to implement guardrails like water use reporting, renewable energy requirements, and community benefits agreements.
The Illinois POWER Act, a comprehensive bill aimed at regulating data centers, failed to pass by the General Assembly's May 31 deadline, meaning proposed guardrails for pending projects, such as water use reporting and renewable energy mandates, will not take immediate effect. Rep. Carol Ammons, D-Urbana, a bill sponsor and chair of the House Energy and Environment Committee, indicated that more stakeholder hearings are needed, with negotiations expected to continue through the summer for a possible fall veto session.
Simultaneously, the Illinois Clean Jobs Coalition and various lawmakers are advocating for a halt to the state's data center tax credit, which has provided substantial incentives since 2019. House Majority Leader Robyn Gabel, D-Evanston, emphasized this as an alternative regulatory measure, echoing Gov. JB Pritzker's earlier proposal to suspend the tax credits. Lawmakers from both chambers sent a letter to legislative leadership on Friday, calling for the tax credit pause in the FY 2027 budget until common-sense guardrails are established. They argue that continuing the tax breaks is fiscally irresponsible given the impact of data centers on the climate, grid strain, and utility bills.
The POWER Act seeks to impose requirements for data centers to pay for their own renewable energy generation, track and report water usage, submit water management plans, and sign community benefits agreements. Sen. Ram Villivalam, D-Chicago, who leads the Senate version of the bill, lauded it as the "most comprehensive data center legislation in the nation." Advocates, including Rev. Darnell Tingle of United Congregations of Metro East, stressed the need for statewide standards to protect communities, particularly those of color, from the downsides of industrial growth, rather than forcing individual municipalities to address data center impacts "one zone meeting at a time."