Pritzker Halts Data Center Tax Perks Amid Power Surge

• Data centers increase demand for electricity sourced from outside Illinois, reversing the state's historical role as an electricity exporter[4] • Fossil fuel power plants leaving the grid create supply-demand imbalances that increase costs for all consumers[4] • Union of Concerned Scientists recommends requiring data centers to publicly report electrical and water needs and secure their own carbon-free energy sources[4] • Utility AEP Ohio implemented a rate schedule requiring data centers to pay for at least 85% of subscribed energy regardless of actual usage[5] • Data centers increase pollution from coal- and gas-fired power plants, generating additional health costs and climate damage[4]

Illinois's data center tax credit pause signals a broader shift in state policy toward cost-shifting mechanisms that require large energy consumers to bear their infrastructure impacts. This aligns with national trends where governors across multiple states are implementing moratoria, new rate structures, and community benefits agreements. The $37 billion projected cost increase over 25 years suggests that without such policies, residential and small business ratepayers would subsidize data center operations. Illinois's approach—combining a temporary tax incentive pause with regional grid coordination and consumer energy credits—represents a middle-ground strategy between attracting tech investment and protecting household affordability. Other states may adopt similar two-year pause models as a negotiating tool to extract better terms from data center developers.