* 6/5/26 - Crains - Pritzker moves to end data-center incentives + 5/31/26 - POWER Act data center regulation won’t move forward this spring...
Buzz Sawyer
"Gov. JB Pritzker is doubling down on his effort to rein in data centers, using an
executive order to stop processing tax-incentive deals after he failed to convince
state lawmakers to approve such a measure during the regular session.
Pritzker also says he wants legislators to take up a wide-ranging menu of reforms
during veto session that resembles legislation that also failed to pass this spring."
Governor outlines framework to protect consumers and lower energy costs,
June 5, 2026
Pritzker moves to end data-center incentives
June 05, 2026 12:42 PM CDT
JB Pritzker is doubling down on his effort to rein in data centers, using an executive order to stop processing tax-incentive deals after he failed to convince state lawmakers to approve such a measure during the regular session.
Pritzker also says he wants legislators to take up a wide-ranging menu of reforms during veto session that resembles legislation that also failed to pass this spring.
It’s a noteworthy move for Pritzker, who ran for governor eight years ago as a business-friendly venture capitalist who focused on technology. But he also made clean energy and climate change the centerpiece of his first term with the passage of the Climate and Equitable Jobs Act, which also included incentives for data centers.
Pritzker cited environmental concerns, from energy and water use to pollution, in announcing his plan today.
“Data centers use massive amounts of electricity, water, and other resources — sometimes as much as a mid-sized city,” the governor’s office said in a statement. “To keep up with the infrastructure demands of data centers and keep bills more affordable for Illinois families, data-center companies can direct more of their own financial resources toward their growth.”
As Pritzker runs for a third term, and eyes a potential bid for the White House, he is drafting behind public sentiment, which has quickly and fiercely turned against data-center operators. From Springfield to Joliet, residents have packed public hearings to oppose data-center projects.
The emergence of widely accessible artificial intelligence programs, such as ChatGPT, kicked off a wave of construction of massive data centers that use far more electricity than their predecessors. Data centers are blamed for a sharp spike in energy demand that has sent prices soaring after years of relative stability. Rising power bills have added to inflation woes that are on the minds of voters, and Democrats, including Pritzker, have made affordability the centerpiece of their campaigns.
The data-center industry says Pritzker’s move will hurt the state economically.
“The pause on Illinois’ Data Center Investment Program will further discourage investment at a time when the industry is facing significant regulatory challenges and uncertainty in Illinois, particularly as Illinois’ energy readiness is seriously in doubt,” Brad Tietz, director of state policy for the trade group the Data Center Coalition, said in a statement.
“The program has generated nearly $16 billion in investment in Illinois since its inception in 2019. Not only will pausing the program significantly curtail investment moving forward, but it will also remove a critical labor protection for Illinois’ skilled trades while not saving the state any money, according to (the Department of Commerce and Economic Opportunity). Rather than pausing the program, Illinois should seek ways to modernize it and encourage opportunities in areas such as clean energy, water reuse and career pathways.”
The Illinois Manufacturers’ Association also criticized the decision.
“Data centers are key to a modern economy, making cloud computing, artificial intelligence, analytics and advanced manufacturing possible. While balanced regulations are important, this pause in tax incentives threatens ongoing investment in Illinois – risking growth, job creation and the next generation of technological breakthroughs,” CEO Mark Denzler said in a statement.
Taking on data centers is a relatively low-risk move for Pritzker, though not one completely without consequences politically.
For decades, technology companies of various stripes have been slow to engage the public and elected officials until they found themselves on the wrong side of public opinion. Rising electricity prices have unleashed a nationwide backlash against data centers.
As a practical matter, only a handful of large-scale data centers—those requiring 1 gigawatt, or enough to power 750,000 to 1 million homes — have been proposed in Illinois, and only one of them appears to be moving toward construction.
Because of an unrelated biometric privacy law that passed long before the surge in data center growth, “hyper scale” users such as Amazon and Google have avoided Illinois for large projects.
Still, Pritzker is siding with environmentalists over labor, which opposes the suspension of data-center incentives because the projects are a source of jobs. The data center incentive program includes a requirement for project labor agreements.
“Governor Pritzker’s decision to pause the Illinois Data Center Investment Tax Credit is a shortsighted decision that will cost Illinois workers and taxpayers,” Climate Jobs Illinois, a labor-backed coalition, said in a statement.
“This pause does nothing to lower utility bills, protect the grid or advance clean energy. Instead, it will send billions of dollars in investment and thousands of union jobs to Indiana, Kentucky, and Ohio — states that sit on the same electrical grid, where those data centers will be built anyway, just without Illinois workers protected by nationally leading labor standards and without the clean-energy requirements we’ve collaboratively fought to establish here.”
Pritzker proposed suspending the data-center incentives in his budget address in February, but it didn’t end up in the budget proposal approved by lawmakers, largely because of labor’s opposition.
The data-center bill illustrates the challenging politics facing the Democrats nationally and locally, as more liberal progressive members gain influence. That calculus becomes more important if Pritzker wins re-election to a third term and sets his sights on national office.
The biggest issue surrounding data centers — particularly large ones — is keeping their thirst for energy from rolling back on utility customers who also are voters. Illinois and other states, along with utilities, are pushing the idea that data center operators ought to fully pay for the costs of generating power as well as the infrastructure to deliver it to their sites.
They want data center companies to bring their own power by investing in construction of new renewable power sources such as wind and solar. It’s particularly important to Pritzker, who backed a law that calls for Illinois to phase out natural gas plants by 2045 and rely solely on nuclear and renewable energy.
But it’s not clear what that looks like in practice.
Pritzker’s proposal today calls for regulators to establish a separate electricity rate category for data centers. Many of the proposals Pritzker made today echo those included in the Power Act, which didn’t get a vote in the General Assembly.
“Now is the time to begin negotiations on policies that will stop rising utility bills, protect our water and end backroom development deals, and we look forward to working with the governor, legislators and stakeholders to get this done in the fall veto session,” the Illinois Clean Jobs Coalition, a group of 200 consumer, business, environmental, environmental justice and other organizations, said in a statement.
The Manufacturers’ Association is worried that the regulation could extend beyond data centers.
“We’re also concerned about any policy framework that would inadvertently harm large manufacturers that use large amounts of energy and water to produce the goods that are a part of our everyday lives and help drive our economy,” Denzler said. “Decisions of this magnitude should not be made unilaterally, and we stand ready to work in collaboration with the Governor and General Assembly to ensure Illinois remains competitive and on the cutting-edge of advancement and innovation.”
POWER Act data center regulation won’t move
forward this spring
Conversations about the POWER Act, a multifaceted data center regulation bill, are not over yet —but those involved say the bill won’t be ready by the General Assembly’s May 31 deadline.
That means pending data center projects will not be subject to guardrails proposed in the bill, like water use reporting, community benefits agreements and requirements that data centers pay for their own energy from renewable sources.
Rep. Carol Ammons, D-Urbana, the chair of the House Energy and Environment Committee and a sponsor of the bill, said at a Tuesday hearing that at least one more subject matter hearing is needed so lawmakers can hear from additional stakeholders.
“We’re just going to finish out this session,” she said after a House subject matter hearing. “We’ll work with staff and our stakeholders and put something else on the books over the summer.”
She said she doesn’t know when the bill might be considered in the future, but it could come up in the fall veto session later this year after negotiations continue through the summer.
On Wednesday, the Illinois Clean Jobs Coalition, a collection of environmental advocacy organizations, businesses and groups, called for quick action.
Read the letter: Illinois Clean Jobs Coalition letter to leadership
“The ICJC supports continued education (about the POWER Act), but communities around the state have spoken and are demanding action from lawmakers to address the impact the influx of data centers has on our utility bills, water resources, and communities,” said Hannah Flath, a spokesperson for the Illinois Environmental Council, on behalf of the Clean Jobs Coalition. “We’re calling on legislative leaders to convene a negotiating table by the end of June to negotiate and work toward passing the POWER Act.”
Pausing tax credits
House Majority Leader Robyn Gabel, a Democrat from Evanston who has led the bill in the House, said at a Saturday rally hosted by the ICJC that there’s another option for regulating data centers while negotiations continue.
“The governor proposed a pause in the data center tax credit in his budget address, and we need to get that done in this year’s budget,” Gabel said. “The last thing we should be doing is handing out tax breaks and incentives to these profitable corporations.”
Since 2019, Illinois has incentivized data center developers to come to the state by offering tax credits, but Gov. JB Pritzker proposed suspending those in February. According to the state’s 2024 report, at least 27 data centers had received incentives totaling $983 million in estimated lifetime tax breaks and benefits.
“With the shifting energy landscape, it is imperative that our growth does not undermine affordability and stability for our families,” Pritzker said at the time. Since then, he’s continued to call for regulations, particularly for data centers to pay for their own energy generation and to source it from renewables.
But advocates have lamented the governor’s lack of engagement on the issue throughout the legislative session, outside of a few public statements.
A group of lawmakers from both chambers sent a letter to House and Senate leadership on Friday calling for a tax credit pause.
“We believe the responsible course of action is to pause the data center tax credits and exemptions in the FY 2027 budget until common-sense guardrails are in place,” they wrote in the letter, obtained by Capitol News Illinois. “It is not only fiscally irresponsible, but also unconscionable to continue to provide millions of taxpayer dollars to Big Tech corporations harming our climate, straining our grid, and making electric bills unaffordable for working families.”
What’s been discussed so far
Gabel said the House is ready to move forward with continued negotiations, and there are signs of bipartisan support.
The House version of the POWER Act has been subject to four hearings since it was introduced in February. Those have involved testimony from a variety of stakeholders, from local leader to utilities and environmental advocates.
Because the bill regulates a rapidly growing and changing industry, lawmakers have wanted to ensure regulations are targeted correctly. During the hearings, they’ve heard about the massive demand data centers put on the grid, risks posed to water sources and impacts on communities.
They also heard warnings that onerous regulations might lead to developers pulling their projects from Illinois, meaning communities could miss out on property and utility tax benefits.
The POWER Act requires data center companies to pay for their own energy generation and for the energy to come from renewable sources such as solar, wind and battery storage.
The bill would also require data center projects to track and report how much water they use and to submit water management plans to the Illinois Water Survey, a nonprofit, nongovernment research group connected to the University of Illinois in Urbana-Champaign.
Another provision would require more transparency about data center development, and for data center developers to sign community benefits agreements in the places they’re constructed.
Rally for action
On Saturday, the Illinois Clean Jobs Coalition held a rally with Gabel and Sen. Ram Villivalam, D-Chicago, the lawmaker leading the Senate version of the bill.
“This is, as has been mentioned, the most comprehensive data center legislation in the nation,” Villivalam said. “This is a big bill for a big problem, but big bills and big solutions take a lot of work.”
He called for rally attendees to continue reaching out to their lawmakers and to use Saturday as an opportunity to talk to them in person.
“The protections in the Power Act are the guardrails, the commonsense guardrails we need to protect ratepayers, communities and our natural resources,” Villivalam said. “The impacts of data centers are too big to ignore. We’re going to keep fighting for transparency. We’re going to keep fighting for fairness. We’re going to keep fighting to hold Big Tech accountable.”
Advocates from around Illinois also spoke about the need for the bill.
“Data centers are coming,” the Rev. Darnell Tingle of United Congregations of Metro East, said. “They are being proposed. They are being negotiated and they are being approved. And too many communities are being forced to respond one city at a time, one village at a time, one zone meeting at a time.”
He said communities of color are too often forced to deal with the downsides of industrial growth, and the POWER Act is a measure to protect those communities.
“We need statewide standards, we need statewide guardrails, we need statewide accountability,” he said. “Yes, we need protection that covers all of Illinois, not just the communities with the most money, not just the towns with the most lawyers, not just the places with the most political access, but everybody.”
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.