Article Summary
- The POWER Act, an expansive bill to regulate data centers, will not pass the General Assembly this spring, but the bill’s leaders say the measure isn’t dead and negotiations will continue through the summer.
- In the meantime, they and other lawmakers who have signed onto the POWER Act said the legislature should pause data center tax credits that have been in place since 2019.
- According to a 2024 report, at least 27 data centers had received incentives totaling $983 million in estimated lifetime tax breaks and benefits.
- Lawmakers said negotiations will include multiple stakeholders, from utility companies to energy advocacy groups, labor unions and the data center lobby.
This summary was written by the reporters and editors who worked on this story.
Conversations about the POWER Act, a multifaceted data center regulation bill, are not over yet —but those involved say the bill won’t be ready by the General Assembly’s May 31 deadline.
That means pending data center projects will not be subject to guardrails proposed in the bill, like water use reporting, community benefits agreements and requirements that data centers pay for their own energy from renewable sources.
Rep. Carol Ammons, D-Urbana, the chair of the House Energy and Environment Committee and a sponsor of the bill, said at a Tuesday hearing that at least one more subject matter hearing is needed so lawmakers can hear from additional stakeholders.
“We’re just gonna finish out this session,” she said after a House subject matter hearing. “We’ll work with staff and our stakeholders and put something else on the books over the summer.”
She said she doesn’t know when the bill might be considered in the future, but it could come up in the fall veto session later this year after negotiations continue through the summer.
On Wednesday, the Illinois Clean Jobs Coalition, a collection of environmental advocacy organizations, businesses and groups, called for quick action.
Read the letter: Illinois Clean Jobs Coalition letter to leadership
“The ICJC supports continued education (about the POWER Act), but communities around the state have spoken and are demanding action from lawmakers to address the impact the influx of data centers has on our utility bills, water resources, and communities,” said Hannah Flath, a spokesperson for the Illinois Environmental Council, on behalf of the Clean Jobs Coalition. “We’re calling on legislative leaders to convene a negotiating table by the end of June to negotiate and work toward passing the POWER Act.”
Pausing tax credits
House Majority Leader Robyn Gabel, a Democrat from Evanston who has led the bill in the House, said at a Saturday rally hosted by the ICJC that there’s another option for regulating data centers while negotiations continue.
“The governor proposed a pause in the data center tax credit in his budget address, and we need to get that done in this year’s budget,” Gabel said. “The last thing we should be doing is handing out tax breaks and incentives to these profitable corporations.”
Since 2019, Illinois has incentivized data center developers to come to the state by offering tax credits, but Gov. JB Pritzker proposed suspending those in February. According to the state’s 2024 report, at least 27 data centers had received incentives totaling $983 million in estimated lifetime tax breaks and benefits.
“With the shifting energy landscape, it is imperative that our growth does not undermine affordability and stability for our families,” Pritzker said at the time. Since then, he’s continued to call for regulations, particularly for data centers to pay for their own energy generation and to source it from renewables.
But advocates have lamented the governor’s lack of engagement on the issue throughout the legislative session, outside of a few public statements.
A group of lawmakers from both chambers sent a letter to House and Senate leadership on Friday calling for a tax credit pause.
“We believe the responsible course of action is to pause the data center tax credits and exemptions in the FY 2027 budget until common-sense guardrails are in place,” they wrote in the letter, obtained by Capitol News Illinois. “It is not only fiscally irresponsible, but also unconscionable to continue to provide millions of taxpayer dollars to Big Tech corporations harming our climate, straining our grid, and making electric bills unaffordable for working families.”
What’s been discussed so far
Gabel said the House is ready to move forward with continued negotiations, and there are signs of bipartisan support.
The House version of the POWER Act has been subject to four hearings since it was introduced in February. Those have involved testimony from a variety of stakeholders, from local leader to utilities and environmental advocates.
Because the bill regulates a rapidly growing and changing industry, lawmakers have wanted to ensure regulations are targeted correctly. During the hearings, they’ve heard about the massive demand data centers put on the grid, risks posed to water sources and impacts on communities.
They also heard warnings that onerous regulations might lead to developers pulling their projects from Illinois, meaning communities could miss out on property and utility tax benefits.
The POWER Act requires data center companies to pay for their own energy generation and for the energy to come from renewable sources such as solar, wind and battery storage.
The bill would also require data center projects to track and report how much water they use and to submit water management plans to the Illinois Water Survey, a nonprofit, nongovernment research group connected to the University of Illinois in Urbana-Champaign.
Another provision would require more transparency about data center development, and for data center developers to sign community benefits agreements in the places they’re constructed.
Rally for action
On Saturday, the Illinois Clean Jobs Coalition held a rally with Gabel and Sen. Ram Villivalam, D-Chicago, the lawmaker leading the Senate version of the bill.
“This is, as has been mentioned, the most comprehensive data center legislation in the nation,” Villivalam said. “This is a big bill for a big problem, but big bills and big solutions take a lot of work.”
He called for rally attendees to continue reaching out to their lawmakers and to use Saturday as an opportunity to talk to them in person.
“The protections in the Power Act are the guardrails, the commonsense guardrails we need to protect ratepayers, communities and our natural resources,” Villivalam said. “The impacts of data centers are too big to ignore. We’re going to keep fighting for transparency. We’re going to keep fighting for fairness. We’re going to keep fighting to hold Big Tech accountable.”
Advocates from around Illinois also spoke about the need for the bill.
“Data centers are coming,” the Rev. Darnell Tingle of United Congregations of Metro East, said. “They are being proposed. They are being negotiated and they are being approved. And too many communities are being forced to respond one city at a time, one village at a time, one zone meeting at a time.”
He said communities of color are too often forced to deal with the downsides of industrial growth, and the POWER Act is a measure to protect those communities.
“We need statewide standards, we need statewide guardrails, we need statewide accountability,” he said. “Yes, we need protection that covers all of Illinois, not just the communities with the most money, not just the towns with the most lawyers, not just the places with the most political access, but everybody.”
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
