New legislation being introduced in Springfield seeks to reign in both the increasing costs to consumers and the environment impacts tied to the rapid growth of data centers in Illinois.
The rapid growth in data centers is linked to both the increasing use of artificial intelligence and the need for increased computing capacity.
Senate Bill 4016, being dubbed the Power Act, would attempt to set “guardrails” on the operators of data centers by requiring environmental impact reports, water use efficiency standards, among others. It also seeks to limit what costs data center operators would be able to pass on to ratepayers, who are already seeing increases on their utility bills.
“Residents are facing increased prices, the centers are depleting water supplies with little to no transparency on the impact to the communities around them,” State Senator Ram Villivalam said during a Wednesday morning news conference in the Loop.
Illinois Gov. J.B. Pritzker weighed on the topic of data centers earlier this during a stop Monday in Belleville.
“To be clear, data centers should pay for the electrictiy that they are using. And if they are in anyway going in to increase the price for consumers, they should pay for that increase, not the consumer,” Pritzker said.
There’s been no shortage of public discussion and feedback regarding the rapid growth. Municipalities in northwest Indiana and the Chicago suburbs in recent months have held public forums ahead of voting on proposals for new data centers.
Environmental impacts, noise and costs are often brought up.
Last month, Naperville’s city council shot down a proposal for a data center that had been discussed for months.
Most Chicago area customers reside in the PJM region – part of the grid that touches 13 states in the Midwest and Mid-Atlantic.
A recent independent monitor’s report of the PJM published in January found that “The combination of existing data center demand and forecast … demand has resulted in significant increases in costs for other PJM customers.”
It also found something else, according to Noah Dormady, an Ohio State economist. He pointed out that the monitor noted that only 4 percent of the cost increase is due to the current demand, and 61 percent of the cost increase is caused by speculation in capacity market. In other words, prices are rising because of how much future load on the grid will be needed for the data centers that might be built in the future.
Dormady says there’s need for additional oversight within the grid and its auction because when big tech companies put in multiple bids to build data centers in multiple states they may only settle on a few projects — falsely inflating the cost which is already being passed to consumers, he said.
“In some cases that load is being duplicated sometimes three, four, or in one case I saw six times,” he said. “So consumers are seeing that price increase because of that speculation in data center load.”
The bill here in Illinois would not affect data centers already built here — no hearings have been set.
The Illinois Manufacturers Association and the Data Center Coalition put out separate statements saying this legislation would potentially hamper the develop of data centers in Illinois and puts economic growth and investment at risk.
This story will be updated.
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