Illinois Data Centers Reshape Energy, Water and Taxes

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Illinois is a major data center hub, with 244 facilities across the state. These data centers require large amounts of reliable, clean electricity and water for cooling, reshaping the state's energy and infrastructure. While data centers create construction jobs and contribute to the economy, they also raise concerns among rural residents about environmental impacts and put pressure on taxpayers through tax incentives.

Why it matters

The growth of data centers in Illinois is a double-edged sword, bringing economic benefits but also straining the state's energy and water resources. Lawmakers are considering new regulations to address issues like renewable energy, equity, and labor standards, as the data center industry continues to expand rapidly.

The details

Illinois boasts the fourth-highest number of data centers in the country, with most development concentrated in Chicago and its suburbs. These facilities require massive amounts of electricity, consuming 12 terawatt hours in 2025, enough to power up to 1.1 million homes. To fuel this growth, Illinois is relying heavily on nuclear power, which generates 54% of the state's electricity. However, electricity prices have risen 15% from 2024 to 2025, outpacing the national average, due in part to the ComEd monopoly's planning decisions. Data centers also consume large amounts of water, ranging from 18,000 to 550,000 gallons per day. As development moves into rural areas, residents have raised concerns about water use, power demand, and noise. To attract data center investment, Illinois offers substantial tax incentives, which can shift costs to taxpayers and reduce the overall tax burden.

• In 2025, Illinois data centers had more than 1,200 megawatts of operational capacity and consumed 12 terawatt hours of electricity.
• From mid-2019 to 2024, 27 data center facilities added 534 full-time operations jobs in Illinois.
• In 2023, the data center industry generated $1.85 billion in total fiscal support for Illinois, up 11% from the prior year.

What’s next

Illinois lawmakers are considering passing more stringent regulations on the growth and operation of data centers, with bills recently introduced in the House and Senate. These bills would require 'hyperscale' data centers to expand renewable energy and 'strengthen equity, transparency, and labor standards in clean energy initiatives,' among other new rules.