Illinois Governor J.B. Pritzker is proposing a two‑year moratorium on new state tax incentives for data centers in an effort to help contain soaring electricity bills and address rising energy demand. Announced during his budget address, the plan would pause new data center tax credits starting July 1, 2026, and direct regulators and grid operators to ensure large energy users, such as data centers, pay their fair share for power capacity.
Pritzker also urged PJM Interconnection LLC, the regional grid operator, to require data centers to bring their own generation capacity or face restrictions during system emergencies. The proposal aims to balance continued economic development with household energy affordability and grid reliability amid increasing demand from data centers and other sources. Pritzker’s statement explained:
We need to think critically about our future energy usage with the needs of Illinois households at the forefront. So, in the face of rising demand and surging prices, I’m proposing a two year pause on authorization of new data center tax credits. With the shifting energy landscape, it is imperative that our growth does not undermine affordability and stability for our families.
There are also a massive number of new renewable energy projects awaiting interconnection across the region that our Northern Illinois grid operator, PJM, has moved too slowly to bring online. Together with a bipartisan coalition of all 13 governors in the PJM region, I demanded they speed it up. And now they are. We also got a price cap from PJM that will save consumers across the region $45 billion through the year 2030. Finally, PJM must force data center developers to pay for capacity resources to power their operations to protect consumers from higher rates.
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