‘A call to action’: Union of Concerned Scientists’ study urges Illinois lawmakers to address clean energy for data center boom

Citing risks of increased pollution and higher electricity costs for all consumers, a science-based nonprofit is calling on Illinois lawmakers to strengthen regulations amid the ongoing data center boom.

But not all stakeholders believe more government intervention is the answer.

Data center development is ongoing in suburbs including Elk Grove Village, Hoffman Estates and Mount Prospect, but more recent proposals in towns such as Naperville and Lisle have been met with pushback from neighbors, mirroring a national trend.

The Union of Concerned Scientists released a report Wednesday recommending new Illinois legislation this spring to encourage the development of more clean energy sources to keep up with the growing electricity demand from data centers.

The report also recommends requiring data centers pay the full cost of their effect on the electrical grid, shielding other customers from sharing the burden.

James Gignac, Midwest policy director for UCS, said energy consumption tops the list of concerns about data center growth in Illinois.

“Our analysis is really a call to action for state policymakers and the Illinois Commerce Commission,” Gignac added.

The recommendations were made with the full awareness of the Clean and Reliable Grid Affordability Act Gov. JB Pritzker signed this month, he said.

The passage of that law addresses many transmission and grid issues, but even stronger commitment to clean energy is sought, said Hannah Flath, director of communications for the Illinois Environmental Council.

The IEC and other members of an Illinois Clean Jobs Coalition are working with UCS to encourage recommended legislation, Flath said.

The report has already reached Illinois House Speaker Emanuel “Chris” Welch.

“The Speaker has a small working group working on this issue,” spokesperson Delores Walton said. “They are hoping to have something resolved by the end of this spring session.”

Critics of clean energy often question its ability to provide the strength and reliability of fossil fuels. Gignac said clean energy has the potential to power data centers’ growth, especially with further development of battery storage technology.

The federal government’s stance on clean energy under the Trump administration is very different from Illinois’, Gignac noted. While a change in the federal position would help Illinois, there’s no reason to wait for it, he added.

The report indicates data centers will account for up to 64% of electricity demand growth in Illinois by 2030.

Without policy changes, such growth would increase pollution and expand reliance on out-of-state electricity, it adds.

Plus, minus better protections for other consumers, the next 25 years could put Illinois residents at risk of an additional $24 billion in energy costs, the study claims.

Gignac said nuclear power isn’t recommended because its expense didn’t meet the cost-benefit thresholds of any of the models.

ComEd is an electricity provider, not a producer, but its Director of Economic Development Max Leichtman said the company is already taking steps that could make legislation unnecessary regarding the financial aspect of the UCS proposal.

The utility has introduced “Transmission Security Agreements” for large electricity users like data centers to protect other customers and ensure fairness.

These would provide more financial security, such as a letter of credit, if a developer didn’t follow through after expensive electricity infrastructure is built.

“We want to make sure there’s an insurance policy in place,” Leichtman said.

ComEd also filed a future grid plan this month to ensure the system can accommodate demand from larger users.

Leichtman said ComEd’s record demand for electricity is 24,000 megawatts. But there are currently more than 100 applications for projects that together call for more than another 30,000 megawatts.

Like ComEd, the data center industry’s response to any new legislation will likely depend on its details, Data Center Coalition Director of State Policy Brad Tietz said.

He felt a mandate could diminish the benefits flexibility has brought developers in providing their own clean energy.

Many suburbs initially welcomed data center developments because of the property tax benefits, but the promise of increased tax revenue hasn’t been enough to push recent proposals over the finish line in some suburbs. Naperville’s city council recently rejected one such proposal last week.

Data center proponents warn Illinois could lose developments to neighboring states.

The UCS proposal could make Illinois mandates for clean energy the strongest nationwide and further affect developers’ perception of their flexibility here, Tietz said.

“You don’t want to make yourself an outlier,” he added. “There is recognition that Illinois is starting to lose its position in the top five and we don’t want that.”

But Tietz believes leaders in Springfield have a good grasp of the balance needed to make data center growth an overall win for the state.

“There are a lot of legislators who understand economic development,” he added. “You can walk and chew gum at the same time.”