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Across the country, state lawmakers are considering ways to address the risks posed by the explosion of power-hungry data centers. They have proposed an array of bills to impose moratoriums on data center development, revoke tax breaks, force data centers to pay for new energy infrastructure, and enact other safeguards.
In Illinois, lawmakers and renewable advocates are especially concerned that data centers could derail the state’s transition to 100% clean energy, since there’s likely not enough renewable sources in the state to meet data centers’ projected demand.
The Protecting Our Water, Energy, and Ratepayers Act, or POWER Act, aims to persuade data centers to pay to build enough new clean energy for sustaining their operations. This should shield customers from rising prices when overall electricity demand increases, proponents of the measure say, and it would ensure that the state’s coal and gas plants don’t need to run past their planned retirement dates just to fuel data centers.
The bill, introduced in February, would entice data centers to make clean energy investments by offering them two of the things such operations most prize: fast interconnection to the grid and uninterrupted power.
Stakeholders involved in crafting the bill said the incentive structure is meant to keep Illinois attractive to data centers, while defending the state’s clean energy shift and customers’ wallets. The facilities could account for between 64% and 72% of energy demand growth in the state by 2030, according to a recent report by the Union of Concerned Scientists, a nonprofit science advocacy group.
Illinois law mandates ending fossil fuel generation by 2045, but unchecked data center growth could cause continued reliance on the state’s fossil-fueled plants — allowed by law if the power is needed — and the importing of dirty power from elsewhere, the report explains.
The bill’s advocates are calling the approach BYONCCE, pronounced like the singer’s name but meaning “bring your own new clean capacity and energy.” (A similar term has been used in other states, sometimes referring to “carbon-free energy.”)
While the addition of new clean energy should help prevent a rise in electricity costs for regular customers, the bill also has other components to keep rates low. It requires data centers to pay for grid upgrades such as the transmission lines and substations needed to serve them. It demands that data centers pay into a “public benefits and affordability fund” that can be used to assist low-income households with utility costs and for environmental justice initiatives; each data center would pay an amount based on its peak demand. The bill also creates a compensation fund for community groups intervening in regulatory proceedings around data centers, helping them push for clean energy and customer protection in individual cases.
“We’re in a new world all of a sudden where demand has gone off the wall,” said MeLena Hessel, Midwest deputy program director of Vote Solar, a nonprofit policy-advocacy organization. “Writ large, we’re trying to figure out how can we get to large loads bringing their own new clean energy and capacity in ways that matter and keep costs lower for customers.”
Supporters of the bill emphasize that while the legislation provides incentives for data centers to develop clean energy, it does not actually force them to do so.
If the power-hungry facilities don’t provide their own energy, they would have to wait, along with all the other large users, in a potentially long line to get connected to the grid. The bill calls for data centers to submit a clean energy supply plan to regulators. If that plan shows that the data center has procured 80% of its predicted annual power demand from new clean energy by 2030 and 100% by 2045, it would receive “fast-track” grid connection.
“We want to encourage data center companies to be clean energy champions, and those that are really excelling are able to jump the queue,” said Kavi Chintam, Vote Solar’s Illinois campaign manager. “That is the incentive that data center companies need and want now.”
Data centers that don’t build enough clean energy could see their electricity curtailed during times of high demand. The bill empowers utilities to take such action as a way to protect other customers from increased prices when the energy supply is tight. That threat is further motivation for data centers to invest in clean energy.
Facilities that pay to build or acquire as much clean energy as they expect to use are guaranteed uninterrupted access to that same amount of power. Solar and wind, as well as battery storage, virtual power plants, and demand-response measures — such as reducing energy use when the grid is stressed — qualify toward that total. Data centers would still be subject to any emergency energy curtailment — like rolling brownouts or blackouts — ordered by regional grid operators.
Illinois has a restructured energy market, in which utility companies do not own generation and instead procure power on the open market to serve customers. In neighboring Wisconsin and Indiana and other states with vertically integrated energy markets, by contrast, utilities pay to build needed generation and pass on the costs to their customers.
Regulators in Illinois and other states with restructured markets may have fewer options to determine how data centers are charged for generation infrastructure, since that is not the purview of the utilities they oversee. In Illinois, management of the flow of electricity on the grid — which utilities do control — is the way to influence data centers’ behavior, said James Gignac, who is the Midwest policy director for the Union of Concerned Scientists’ climate and energy program and one of the authors of its recent report.
“Offering compelling incentives for what the data centers wish to have is our approach,” Gignac said. “They are looking for firm service and the quickest way possible to connect to the power grid. By challenging data centers to meet these higher levels of clean energy, we can recruit the most responsible data center operators to Illinois.”
The Data Center Coalition, a trade group that represents developers of the facilities, and the Illinois Chamber of Commerce, which promotes investment in the state, did not respond to queries for this story.
Three times in the last decade, Illinois’ clean energy supporters and industry representatives have worked closely with lawmakers to pass sweeping energy bills. A 2017 law created ambitious renewable-energy mandates and job creation programs, a 2021 law bolstered clean energy and equity targets, and a law passed last fall addressed the need for much more energy storage on the grid. Those three pieces of legislation were spearheaded by legislators working with the Illinois Clean Jobs Coalition, including dozens of advocates for consumers, clean energy, and environmental justice. That coalition is also backing the data center bill.
Coalition members described the POWER Act as a similarly ambitious measure, which will likely go through a long process of consensus-building.
In addition to the clean power and affordability provisions, the bill includes other safeguards, like mandates for water resource planning and quarterly water-use reports. It prohibits nondisclosure agreements with data centers, mandates community benefit agreements, and requires a proposed data center’s cumulative impact to be examined in the context of other existing or proposed burdens on local residents.
Illinois’ legislative session ends in late May, and bills can also pass in a fall veto session or a special session called by the governor.
Proponents of consumer protection and clean energy say it is crucial for a data center–focused bill to pass soon, since numerous such facilities for powering AI are proposed in the state. The Chicago region, in particular, is already home to around 200 data centers, according to the organization Data Center Map, and more could be in the works. A $20 billion data center proposal was recently approved by local officials southwest of Chicago, in Joliet, for example. In February, Democratic Gov. JB Pritzker called for a two-year pause on state tax incentives for data centers in response to the growing concern from communities.
“This is an urgent problem,” Chintam said. “We need to do something now.”
A correction was made on March 12, 2026: A previous version of this story misrepresented the Union of Concerned Scientists’ prediction for data center energy demand in Illinois by 2030. Data centers could account for between 64% and 72% of growth in demand by that time, not total demand.
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