Illinois Lawmakers Push Data Center Water Transparency Bill Amid AI Boom Concerns

Illinois Lawmakers Push Data Center Water Transparency Bill Amid AI Boom Concerns

SPRINGFIELD — As artificial intelligence companies race to build data centers across Illinois, lawmakers are pushing for new transparency requirements on water usage that could reshape how these facilities operate in the state.

The House Executive Committee held its final hearing on the POWER Act, which would require data centers to submit detailed water use plans and report their consumption four times a year to the Illinois Power Agency.

"The POWER Act requires data centers to produce plans for water use, scarcity and sustainability," said Rep. Ann Williams, D-Chicago, who chaired the committee. "It also requires data centers to use the most water efficient cooling method — using closed loop cooling as a baseline for efficiency — and to report that usage four times a year."

Under the legislation, data centers would need to submit their plans for review from the Illinois Water Survey, a nongovernment group that monitors water supplies across the state.

Helena Volzer, senior source water policy manager for the Alliance for the Great Lakes, described the POWER Act as the best mechanism to manage water use by data centers.

"There's really not much in the way of water use reporting or evaluating whether or not the watershed can handle a proposed water use before that water use occurs," Volzer said.

Climate change is threatening water sources with hotter, drier summers and more droughts, according to Volzer. She noted that the connection between groundwater and surface water means surface water resources can become stressed if groundwater becomes depleted.

"The connection between groundwater and surface water means that surface water resources can become stressed if groundwater becomes depleted," Volzer said. "With simultaneously competing demand for water from agriculture, industry, data centers and residential use, communities in Illinois are facing complex tradeoffs in managing primary water supplies."

The amount of water a data center uses can vary widely and depends on factors like its size, outside temperatures and how it cools its servers. One facility can use as much water as a small city in a day, according to the committee hearing.

Opposition to the bill has emerged from the data center industry. Brad Tietz, the Midwest policy director for the Data Center Coalition, pushed back on the planning requirements, arguing that data center developers already work closely with utilities and municipalities to make plans and ensure the facilities will have the cooling resources they need.

The data center industry opposes the POWER Act on the grounds that it singles out one industry when there are others that use a lot of water and aren't under the same scrutiny.

Compared to agriculture, some manufacturing and golf courses, Tietz said, data centers are much more water efficient.

Tietz also said data center cooling methods are constantly evolving, and innovations include building near water treatment plants or using cooling methods that involve non-potable water, recycled water or air.

He said those methods are possible in Illinois, especially given its cooler temperatures, which could allow data centers to use air cooling outside of summer months.

"I acknowledge that some of those methods require more energy, and the choice depends on the hardware in the facility," Tietz said. "Cooling data centers involves inherent tradeoffs."

Rep. Theresa Mah, D-Chicago, said she didn't understand why the industry objected to making project plans public.

"I live in a community where there's a data center nearby and it's been important for my constituents and myself to know what's happening there and to have that transparency," Mah said. "It seems like it just makes sense for everywhere else in the state as well."

Democrats in the Senate have held hearings about statewide groundwater management and are considering how to approach the issue.

Federal Legislation Mirrors State Efforts

U.S. Senator Dick Durbin introduced a similar federal Data Center Water and Energy Transparency Act in March that would require data centers to report their energy and water usage to states where they operate.

The federal bill would also require prospective data centers to report their estimated energy and water consumption over the first five years of operation and make that information available to local governments considering data center construction in their communities.

"If you've noticed a sharp increase in your utility bills lately, it may be from the growth of energy-hungry data centers," Durbin said. "Illinoisans deserve an honest analysis of the electricity and water needs of these data centers as they crop up around the country."

The International Energy Agency estimates that a 100-megawatt data center may consume about the same amount of water as 2,600 households, and many proposed data centers are more than 10 times the size of a 100-megawatt center.

Senator Durbin noted that there are approximately 4,000 active data centers in the United States with roughly 3,000 more planned or under construction, with rural counties increasingly targeted for data center development.

Environmental Groups Back Water Transparency

The Environmental Law and Policy Center introduced the POWER Act in February, describing it as a way to protect ratepayers and safeguard Illinois' water resources.

The POWER Act aims to ensure that large new energy users do not undermine the state's clean energy and environmental justice goals, according to the press release.

Brad Klein, Managing Attorney for the Environmental Law and Policy Center, said the POWER Act turns the data center boom into a race to the top in Illinois.

Data centers that bring their own new clean power and cover their own costs can earn quick access to the power grid, according to Klein.

The bill would also require data centers to pay for their own energy and the infrastructure to generate it, and require that energy come from renewable sources.

The POWER Act would also create the Residential Automated Solar Permitting Platform Act to require solar permitting for residential properties.

What's At Stake

The battle over data center regulations comes as Illinois continues to attract artificial intelligence companies seeking access to reliable power grids and water supplies.

The POWER Act would require data centers to use closed loop cooling as a baseline for efficiency, which supporters say is the most water-efficient method available.

Opponents argue that the choice between energy and water is a matter of balancing these competing concerns and that the legislation should not single out data centers.

The Illinois Power Agency would receive regular reports on water usage from data centers operating in the state, providing transparency for communities considering data center development.

The legislation is currently under consideration in the House Executive Committee and could move to other committees for further review.