POWER Act Intended to Protect Ratepayers and the Environment from Data Center Harm
Advocates call on data centers to cover their own costs
CHICAGO, IL - NRDC joined the Illinois Clean Jobs Coalition today at a press conference in Chicago calling for the Illinois General Assembly to protect water, climate goals, consumers, and communities by passing the POWER (Protecting Our Water, Energy, and Ratepayers) Act.
The rapid expansion of data centers in the United States is dramatically transforming our electricity system. The POWER Act (SB4016/HB5513), introduced last week in the IL General Assembly, would establish nation-leading guardrails on data centers that will minimize impacts on Illinoisans’ utility bills, climate, and water while driving a competitive “race to the top” for responsible data center investment.
The following is a statement from Kari Ross, Midwest energy affordability advocate, at NRDC (Natural Resources Defense Council):
"Big Tech companies can no longer get a free pass to drive up our energy bills, strain our local water supplies, and pollute our communities. The POWER Act ensures that data centers pay for their own electric grid build-out and are powered by the new clean energy they bring to the grid so Illinoisans can maintain our nation-leading climate goals.
“By passing this bill, the state will hold these corporations accountable and shield our communities from outrageous, unfair costs and environmental harms."
POWER Act highlights include:
- Prohibit shifting data center costs onto consumers: New rules holding data centers accountable for their own energy needs will ensure that, during peak electricity demand, data centers can only use the amount of power proportional to the amount of new clean energy they bring to the grid. The policy will also protect consumers from subsidizing the costs of upgrading data center distribution and transmission infrastructure.
- “Bring Your Own New Clean Capacity and Energy” (BYONCCE) Supply Plans: Data centers will be required to show how they will power their operations with new clean energy. These plans must rely on renewable energy and battery storage projects that can deliver electricity where the data center is located and add new power to the grid. Energy efficiency, flexible operations, and programs that reduce electricity use during peak times can also help meet this requirement.
- Faster Grid Connection for Clean Energy Leaders: Data centers that demonstrate responsible clean energy leadership will be able to connect to the electric grid ahead of their competitors, incentivizing economic development that protects consumers and our climate.
- Public Benefits and Affordability Fund: Calibrated to their size, all data centers will pay annually into a restricted fund administered by the Department of Commerce and Economic Opportunity (DCEO) and Illinois EPA to enhance:
- Energy Affordability: Data center payments will be used to enhance DCEO utility-bill assistance (LIHEAP), shutoff avoidance assistance (UDAP), and whole-home retrofit incentive (IHWAP) programs for income-qualified electric customers.
- Environmental Justice: Payments will enhance Illinois EPA grantmaking for projects such as air quality monitoring and water infrastructure improvements.
- Protecting Consumers: Just like the electric grid, when a data center connects to our water utilities, they need to pay their fair share. Data centers need to show they are doing so with a transparent cost-of-service model.
NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Established in 1970, NRDC uses science, policy, law and people power to confront the climate crisis, protect public health and safeguard nature. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Beijing and Delhi (an office of NRDC India Pvt. Ltd).