Illinois Lawmakers Push POWER Act to Force Data Centers to Pay Their Own Energy Costs

Illinois House and Senate Bills Would End Cost-Shifting for Ratepayers

Illinois is in the midst of a fierce battle over who pays for the growing power demands of data centers. State Representative Robyn Gabel and State Senator Ram Villivalam have introduced the POWER Act, legislation that would require data centers to cover their own energy and water costs without passing the expense to everyday consumers.

A poll conducted by the Global Strategy Group in March 2026 surveyed 800 likely Illinois voters. The results showed nearly 70 percent support for the POWER Act. That number climbed to 75 percent when voters heard more details about the proposed legislation.

Data centers consume massive amounts of electricity and water to operate around the clock. Some facilities use up to 5 million gallons of water per day. In certain areas, data centers make up about 1 percent of electricity demand but are linked to a 595 percent increase in capacity costs. That cost pool totals about 1.7 billion dollars, with most of it being passed to other customers through higher utility bills.

What the Bill Would Require

The POWER Act, also known as Senate Bill 4016 and House Bill 5513, includes several key provisions:

• Requiring data centers to pay for their own energy generation and the infrastructure needed to generate it
• Mandating that the energy used by data centers come from renewable sources
• Establishing transparency requirements for water use and water permits managed by the Illinois Environmental Protection Agency
• Requiring the IEPA to conduct assessments about how data centers would impact communities
• Mandating that data center developers enter community benefits agreements with transparent public engagement

House Majority Leader Robyn Gabel described the regulations as common sense guard rails. She said the legislation ensures working people are not left footing the bill for data centers.

Obviously, we know that data centers can provide economic development. But on the other hand, I want to make sure that our environment is protected and our people are protected, Gabel said at a press conference in downtown Chicago on Monday.

State Senator Ram Villivalam of the northwest suburbs acknowledged the state does not want to choke off economic development, employment, and revenue that data centers can bring. He said the issues are complicated, including high demand for electricity in a tight marketplace.

Help us pay for it, help us bring your own energy. That is another simple concept that we are trying to make sure does not have a detrimental impact on our residents, Villivalam said.

Environmental and Community Concerns

Christine Nannicelli of the Sierra Club said secrecy prevents other elected officials from deciding whether a proposal is truly in the public interest. She cited a case in Central Illinois where a county officeholder did not have access to community benefits agreements when voting on a data center project.

He had to vote on the project. He serves on the Sangamon County Board. He did not get a chance to see the community benefits agreement. We are seeing these processes move forward without folks having a real seat at the table, Nannicelli said.

Data centers also require substantial amounts of water for cooling. Villivalam noted that water is the most valuable resource in the state. He emphasized the need for water efficiency standards, water reuse, and policies that protect future generations.

Industry Response

Data Center Coalition Director of State Policy Brad Tietz expressed concern that Illinois was in the top five for data center development from 2019 to 2024 but is now declining. He said the legislation should take into account developments already happening in the industry.

ComEd has put forth a large load tariff before the Illinois Commerce Commission to help make sure that data centers are paying their full cost of service, Tietz told The Center Square.

Kari Ross of the Natural Resources Defense Council, which worked with Global Strategy Group to survey voters, said the legislation protects consumers from unnecessary rate hikes.

It protects your wallet from unnecessary rate hikes by ensuring that the companies creating this demand are the ones paying for grid infrastructure, like new power lines and energy costs, not you, Ross said.

Political Will and Next Steps

During his annual budget address, Governor JB Pritzker put the onus on PJM Interconnection, the electric grid operator that covers Illinois and parts of the East Coast. Pritzker argued that PJM must force data center developers to pay for capacity resources to protect consumers from higher rates.

The Governor also proposed a two-year pause on tax credits for new data centers to compensate for rising demand and higher prices. Illinois has provided tax incentives for data centers since Pritzker signed bipartisan legislation in 2019.

According to the states 2024 report, at least 27 data centers had received incentives totaling 983 million dollars in estimated lifetime tax breaks and benefits.

The POWER Act remains in committee with a Senate deadline of April 24. Negotiations on the bill are ongoing, including discussions with municipalities, workforce groups, labor organizations, manufacturing groups, and environmental groups.

Aurora has already begun regulating data centers with ordinances that require developers to conduct studies on noise, water consumption, and energy needs. Future data centers would need to meet standards for noise, vibrations, water use, and energy use. New and expanded data centers would also need to install and operate either on-site renewable energy techniques or on-site resilience storage procedures.