Stressing the concerns over growing energy costs for consumers and affordability, Illinois Governor J.B. Pritzker on Wednesday called for a two-year pause on the state’s tax credit program for data centers.
The proposal was announced during Pritzker’s “State of the State address” and would directly impact the existing data center tax credit program. It comes during a time when there’s been public pushback against new proposed data centers.
Illinois already has more than 200 data centers across the state, according to the data center map – an industry website that tracks data centers across the country.
“Affording to have a home is one thing. Affording to live in a home is another… electricity is eating up more and more of household budgets across the country,” Pritzker said.
“I am proposing a new two year pause on new data center tax credits. With all the shifting energy landscape it is imperative that our growth does not undermine affordability and stability for our families,” he said.
The governor’s announcement comes amid growing public pushback over noise and environmental concerns regarding data center expansion in Chicago suburbs. Just last month, Naperville shot down a proposed data center that had been on the table for months.
Industry supporters argue the hundreds of data centers in Illinois create jobs and contribute more than $1.8 billion in state and local tax revenue.
In a statement responding to the governor’s proposal – the Data Center Coalition said this “proposed pause… could further discourage investment at a time when the industry is facing significant regulatory challenges and uncertainty in Illinois…”
Northern Illinois is one of 15 states in the PJM grid – which covers the Midwest and Mid-Atlantic states.
A January report by an independent monitor found that “only 4% of the cost increase is due the current demand; and 61% of the increase is caused by speculation on capacity market – meaning how much load on the grid will be needed for future data centers that might be built – which is not good news for your bill, according to Noah Dormady, an Ohio State economist.
“Consumers can expect that those capacity prices are going to continue to accelerate capacity prices on their retail bill going forward,” Dormady told NBC 5 Investigates during a recent interview.
The Illinois Clean Jobs Coalition put out their own statement saying they support the governor’s proposal. The governor’s idea comes on top of a separate bill called the POWER ACT which calls on data centers to reinvest in communities and pay for their own energy costs without passing them onto consumers.
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