Advocates argue new data center restrictions might close Illinois market

By Jim Talamonti | The Center Square
The Center Square

(The Center Square) – Illinois lawmakers have proposed stricter regulations on data centers in the state, but an industry advocate says the legislation would essentially close the market for development.

The POWER Act would prohibit cost shifting, ensure data centers power their own operations and provide clean energy incentives.

State Rep. Carol Ammons, D-Urbana, urged her colleagues to support House Bill 5513 and Senate Bill 4016.

“The people of Illinois cannot afford to continue to bear the cost of this innovation,” Ammons said Thursday at a press conference in Champaign.

Data Center Coalition Director of State Policy Brad Tietz said Illinois was in the top five for data center development from 2019 to 2024, but the state is now declining.

“If you were to layer on Senate Bill 4016 in its current form on top of what’s already occurring in the Illinois market, you might as well close the Illinois market for data center development,” Tietz told TCS.

Citing research by site selection firm JLL, Tietz said Illinois has lost an estimated $100 billion in data center development because of the state’s Biometric Information Privacy Act.

Tietz said the 638-page POWER Act would make developing a data center in Illinois nearly impossible.

State Sen. Ram Villivalam, D-Chicago, introduced SB 4016. The companion measure, HB 5513, was filed by state Rep. Robyn Gabel, D-Evanston.

Citizens Utility Board Communications Director Jim Chilsen said the POWER Act would be a huge step in the right direction.

“We’re paying higher bills because of these data centers,” Chilsen said.

Kady McFadden of the Illinois Clean Jobs Coalition said data centers need to pay for their own transmission infrastructure and play by Illinois rules.

“You’re going to pay for your own power needs rather than plugging into the grid, which is all the power that homes and businesses use in Illinois. And we’re not going to let you just put a straw in Lake Michigan without telling us how much water you’re actually using,” McFadden said.

Tietz said other industries use far more water than data centers.

“We’re increasingly getting more and more efficient as an industry by the day, and the average data center today is going to use less water than a golf course,” Tietz said.

Tietz said the data center industry is leaning into new technologies like closed-loop water systems and liquid immersion.

The Illinois Manufacturers’ Association said the POWER Act would hamper data center development.

“Instead of penalizing innovation, we encourage policymakers to focus on an all-of-the-above energy approach that prioritizes maintaining and expanding baseload generation sources, investing in transmission and affordable battery storage, and deploying more renewable resources,” IMA President and CEO Mark Denzler said in a statement.