Stephenson County Considers Data Center Moratorium Amidst Statewide Reassessment
Stephenson County is considering a six-month moratorium on data center development to update zoning rules and address concerns about electricity and water consumption. This follows similar debates in neighboring Ogle County and Rochelle, where a proposed data center was recently rejected by city leaders due to energy and water usage issues. Illinois state lawmakers are also reassessing data center regulations and have paused new tax incentives amidst growing concerns about their impact.
Stephenson County, Illinois, is contemplating a six-month moratorium on data center development, as its Planning and Development Committee seeks to update zoning regulations to address significant concerns regarding electricity and water consumption associated with these facilities. This local discussion mirrors a broader trend in Northwest Illinois and across the state, where communities and lawmakers are re-evaluating the rapid expansion of the data center industry.
Neighboring Ogle County has also seen ongoing debate over data center development, particularly near Byron, where land previously zoned industrial for data centers faces community opposition due to worries about water, energy, and land use. Furthermore, Rochelle city leaders in Ogle County unanimously rejected a development agreement in April for a 300,000 square-foot data center project that would have required 48 megawatts of electricity.
The local considerations are part of a statewide reassessment. Governor J.B. Pritzker, who in 2019 signed legislation offering tax incentives for data centers, has now paused new state tax incentives. The Governor cites the need for safeguards to prevent data centers, particularly those driven by AI, from escalating utility costs due to their significantly higher demands for electricity, water, and land. Republican gubernatorial candidate Darren Bailey has proposed an even more stringent approach, suggesting a temporary halt to existing incentives while the state conducts an impact study.
Illinois had previously committed an estimated $666 million in incentives to 34 data center projects through 2025. Lawmakers are expected to revisit regulations during the November veto session, with potential proposals including requirements for data centers to provide their own energy, report water usage, and enter community benefit agreements.