Gov. Pritzker slows down data center development
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After years of championing data center development, Illinois Gov. JB Pritzker is pumping the brakes amid concerns over spiking energy bills, water use and pollution.
Why it matters: Last week, Illinois data center regulation looked dead. Two major bills aimed at pausing tax incentives and addressing environmental issues tanked in Springfield.
- But Pritzker's surprise Friday announcement breathes new life into the effort.
State of play: Illinois' 222 data centers have attracted billions in investment to the state over the last five years, but they've also driven skyrocketing consumer energy bills while using millions of gallons of water a day, which they don't currently have to report to the state.
What's happening: Pritzker's announcement will effectively pause new tax breaks for data centers starting July 1.
- He also lays out a framework to require data centers to pay for their fair share of energy, develop new clean energy, disclose and manage water use, observe clean air standards and more.
- The framework mirrors many provisions of the POWER Act that just stalled in Springfield to the chagrin of environmental groups.
What they're saying: "The Governor's principles are the reforms Illinoisans across the state are asking for, and they just make sense: data centers should pay their fair share, power their facilities with clean energy, and engage transparently with local communities," Hannah Flath at Illinois Environmental Council tells Axios.
- "We're excited to work with the Governor, legislative champions, and other stakeholders to get resounding support on these popular, commonsense proposals this summer."
The other side: "Not only will pausing the program significantly curtail investment moving forward, but it will also remove a critical labor protection for Illinois' skilled trades while not saving the state any money, according to DCEO," Brad Tietz, a state policy director for the Data Center Coalition, said in a statement.
- "Rather than pausing the program, Illinois should seek ways to modernize it and encourage opportunities in areas such as clean energy, water reuse, and career pathways."
By the numbers: In explaining the move, Pritzker's office noted that:
- "Demand from data centers has already raised [energy] costs by $13 billion and data center demand could raise costs another $37 billion in Illinois alone in coming years."
- "Air pollution from data centers' power generation could cause up to $20 billion in public health burden nationwide by 2030."
- Illinois data centers use as much as 5 million gallons of water a day.
What we're watching: Whether Pritzker has just become a target of the AI industry, which has raised more than $100 million in this election cycle to attack politicians deemed unfriendly to data centers.