Support the POWER Act (SB4016/HB5513):

Protecting Our Water, Energy, and Ratepayers from Data Center Impacts 

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The Problem 

1. Data centers are increasing utility bills for all consumers. Skyrocketing energy prices are almost entirely driven by unprecedented demand from energy-intensive data center development. While the passage of the Clean and Reliable Grid Affordability Act (CRGA) was an important first step to mitigate rising utility bills and protect our power grid, critical action is still needed from the legislature to hold Big Tech accountable for driving up energy prices. 

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2. Data centers are massive water users, with no transparency for the communities who depend on that water. A large data center can use millions of gallons of water per day, enough to strain local supplies and undermine long-term water planning and management. Currently, Illinois lacks basic protections to ensure our water needs are not jeopardized by water-intensive industrial corporations. 

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3. Data centers exacerbate pollution in vulnerable communities and threaten Illinois’ clean energy goals in the Climate and Equitable Jobs Act (CEJA). Data centers use dirty diesel generators to power their facilities in so-called “emergencies,” are huge sources of soot and particulates, and are often located in communities that already bear the brunt of industrial pollution. Absent stronger policies, data centers will increase pollution and escalate the state’s reliance on out-of-state electricity supply. 

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The Solution 

The POWER Act (SB4016/HB5513) establishes nation-leading guardrails on data centers that will minimize data center impacts on our utility bills, climate, and water while driving a competitive “race to the top” for responsible data center investment. The POWER Act will: 

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Establish policies that ensure data centers pay their fair share to protect consumers and our climate. 

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1. Prohibit shifting data center costs onto consumers: New rules holding data centers accountable for their own energy needs will ensure that, during peak electricity demand, data centers can only use the amount of power proportional to the amount of new clean energy they bring to the grid. The policy will also protect consumers from subsidizing the costs of upgrading data center distribution and transmission infrastructure. 

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2. “Bring Your Own New Clean Capacity and Energy” (BYONCCE) Supply Plans: Data centers will be required to show how they will power their operations with new clean energy. These plans must rely on renewable energy and battery storage projects that can deliver electricity where the data center is located and add new power to the grid. Energy efficiency, flexible operations, and programs that reduce electricity use during peak times can also help meet this requirement. 

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3. Faster Grid Connection for Clean Energy Leaders: Data centers that demonstrate responsible clean energy leadership will be able to connect to the electric grid ahead of their competitors, incentivizing economic development that protects consumers and our climate. 

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4. Locally Driven Accountability within Municipal Utilities and Electric Cooperatives: Before signing a contract to serve a large data center, a municipal utility or electric cooperative (muni or co-op) must ensure that data center costs are not passed on to other customers and engage its ratepayers in an update to its long-term energy plan (Integrated Resource Plan). Munis and co-ops must also develop new clean energy supply plans to ensure new demand is met at the expense of data centers themselves. 

 

 

Establish critical protections to limit pollution and protect vulnerable communities.

 

1. Close Data Centers’ Free Pass for Back-up Generator Pollution: Protect Illinois communities by limiting the use of back-up diesel generators to true emergencies. 

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2. Cumulative Impacts Assessment for Environmental Justice Communities: No data center may be located within three miles of an Environmental Justice or Equity Investment Eligible Community unless an Illinois EPA cumulative impact assessment demonstrates that the project will not disproportionately increase health, welfare, or environmental risks to the community. 

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3. Transparent Public Engagement and Community Benefits: Data centers will be required to a) transparently engage local communities in binding Community Benefits Agreements, b) contribute to an intervenor compensation fund that allows impacted communities to protect themselves from harm, and c) be prohibited from using Non-Disclosure Agreements with local governments. 

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4. Public Benefits and Affordability Fund: Calibrated to their size, all data centers will pay annually into a restricted fund administered by the Department of Commerce and Economic Opportunity (DCEO) and Illinois EPA to enhance: 

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                         a. Energy Affordability: Data center payments will be used to enhance

                             DCEO utility-bill assistance (LIHEAP), shutoff avoidance assistance (UDAP),

                             and whole-home retrofit incentive (IHWAP) programs for income-qualified electric customers. 

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                         b. Environmental Justice: Payments will enhance Illinois EPA grantmaking for projects

                             such as air quality monitoring and water infrastructure improvements. 

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Establish sustainable water use, transparent reporting, and consumer protection requirements

for data centers to ensure Illinois’ water resources are used responsibly.

 

1. Transparent Reporting: Data centers must transparently report their expected and actual water use, including where they obtain their water, and how much they are taking, using, and discharging.

 

2. Water Efficiency Requirements: Cooling is the largest driver of water use at data centers. Illinois can ensure our water resources are used wisely by requiring an assessment of cooling alternatives and mandating those alternatives that are at least as efficient as closed-loop cooling. 

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3. Protecting Consumers: Just like the electric grid, when a data center connects to our water utilities, they need to pay their fair share. Data centers need to show they are doing so with a transparent cost-of-service model. 

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4. Protecting Drinking Water Supply: The Illinois State Water Survey (ISWS) will review a data center’s water resources plan and report on its likely impacts to our precious water resources. The ISWS is well positioned to study and inform the public of possible adverse water resource impacts from a data center. 

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The bottom line:

 

Data centers should cover their own costs and bring their own clean power to the grid. Illinois must act to protect our water, climate goals, consumers, and communities by passing the POWER Act (SB4016/HB5513) this spring. 

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For more information, contact Kady McFadden, kady@kadymcfadden.com.    

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