Data center regulations weighed; some worry over jobs, energy, taxes

By Sean Reed | The Center Square
The Center Square

(The Center Square) – Major bills in both the state Senate and House may heavily regulate data centers in the state. With the proposal spanning hundreds of pages, both those in favor and against the bill have a lot of arguments.

With a little more than two weeks of legislative session remaining, lawmakers have continued to weigh if and how they might regulate data centers over energy consumption and related issues.

A House Committee heard from multiple environmental organizations in favor of the 632-page bill on data centers late Tuesday.

House Bill 5513 would expand what permits data centers will be required to obtain, require them to report their energy use, pay into community funds and plan to save water and while bringing new energy capacity to the grid, according to Rep. Carol Ammons, D-Urbana.

Andrew Rehn and Tyshianna Bankhead, both representing member organizations of the Illinois Clean Jobs Coalition, and Brian McDaniel from Citizens Utility Board all spoke in favor of the plan.

Rehn said water consumption by data centers could leave Illinoisans without vital resources.

“Illinois lacks meaningful protections against large water users like data centers overusing our water and unlike many of our neighboring states, we do not regulate or meaningfully monitor water usage or overconsumption,” Rehn said.

McDaniel favors the act because it will force new data center projects to bring renewable energy projects alongside development, expanding grid capacity as usage increases.

“Large data centers can increase these costs for all of us on different levels of the power system, from the utility level, the distribution level, to the high-voltage transmission lines, all the way to the markets that set our prices for power generation,” McDaniel said.

Questions arose about data center power usage, along with associated rate hikes.

State Rep. Blaine Wilhour, R-Louisville, noted that recent rate hikes being associated with data centers did not happen in a vacuum.

“You’ve got to take that into the context of the capacity that had been previously taken off the market because of legislation that this side of the table supported,” Wilhour said, referring to Democrats’ support of the Climate and Equitable Jobs Act.

Brad Tietz from the Data Center Coalition and Joe Duffy from Climate Jobs Illinois were against the legislation, though for varying reasons.

Duffy, representing trade unions and other members of the renewable energy industry, said those he represents oppose the bill because the bill doesn’t strongly enough regulate how the required energy projects will be built.

“We have concerns about several provisions,” Duffy said. “A data center developer could meet Illinois’ clean energy obligations by building a non-union solar project in Ohio, Missouri, or Indiana, for example, then count it toward their Illinois requirements, collect Illinois incentives, and generate none of the benefits here.”

Tietz, however, opposes the bill on behalf of data center interests. He said new projects will be highly discouraged from choosing Illinois as the place to build, pushing jobs to neighboring states.

“Every data center is different. They have different purposes, different workloads, and activities occurring in them and different customers,” Tietz said.

Tietz went on to say the bill is restrictive on all centers, even though they are not all created equal.

Tietz also said new data center projects have vastly contributed to the state’s tax base and economy in recent years, providing jobs in various sectors statewide.