Right, we need eight?
Yeah.
All right. The Committee on Environmental Protection and Energy will come
to order.
Good afternoon, everybody.
Thank you for being here today.
Today, the committee has one agenda item, a subject matter
hearing regarding the provision in
SO2024-0008201,
which directed the Department of Environment to report on the environmental and
energy impacts of data centers in Chicago.
I will begin with a roll call to establish quorum.
Chair Hadden is present. Vice Chair Knudsen.
Alder Espada.
Alder Ramirez. Alder Lopez.
Present.
Alder Tavares.
Present.
Oh, we'll get to you for the Rule 59, Alder Tavares.
Alder Sigcho-Lopez. Alder Cruz.
Alder Rodriguez-Sanchez. Alder Conway. Alder Riley.
Present.
Alder Lawson.
Alder Clay.
Alder Martin,
and Alder Manaa-Hoppenworth.
All right.
We have nine members? Nine members present.
We have a quorum.
Joining us virtually are Alders Tavares,
and per Rule 59, could I have a motion to approve Alder
Tavares' remote participation now that we've established quorum?
All right. Alder Manaa-Hoppenworth so moves.
All those in favor say aye.
All those opposed, nay. In the opinion of Chair, the ayes have it.
Fantastic. And Alder Tavares, thank you for being here today.
You'll be marked present.
Non-members? Nope. So at this time, we will begin the public
comment period. Public comment is limited to 30 minutes, and out of respect for
everybody's time, each speaker is limited to three minutes.
Our first speaker for public comment is Shakeena Sims.
Good afternoon, everyone. I'm Shakeena Sims with NRDC Safe Water
Initiative. As we continue discussions around data centers, I want to
ensure that one resource that affects every Chicago resident,
business, and neighborhood doesn't get lost in the conversation, and that's water.
Studies show that low-income households spend a disproportionate amount of their
income on water bills. At the same time, Chicagoans are looking to their
leaders to invest in long overdue infrastructure upgrades to
deliver safer drinking water to their homes and alleviate flooding in their
basements. Safe water and a dry basement shouldn't be a luxury, and
affordability shouldn't be an afterthought.
That's why it's important that we're careful about the demands we're placing on our
aging infrastructure and the pockets of our residents.
There is rapid data center growth across the country, and communities across
demographics continue to voice concerns.
On the energy side, utility bills are skyrocketing and residents are at
threat of disconnection due to high energy burdens.
On the water side, residents share similar concerns.
How much water do the data centers use?
Will usage result in higher water bills and lower water pressure?
And what other environmental impacts are at play, especially on communities
already burdened with pollution?
That's why community voices must be meaningfully included at
every stage of the process. It builds trust and ensures local priorities and
concerns are reflected in decisions that will ultimately affect communities for
decades. The community deserves transparency.
Data centers should be required to report water usage, and the
information should be clear and accessible, and that transparency must be
paired with accountability. Reporting is one thing, but what are the
consequences where shared commitments and standards aren't met?
These are just two pieces of a much broader list.
There's also a lot for us to learn from other communities across the country.
But community involvement, transparency, and accountability
should always remain at the forefront. Thank you so much.
All right. Thank you. Our next speaker is Ayanna Simba.
Hello. Good morning, committee. My name is Ayanna
Simba, and I'm here on behalf of the Illinois Environmental Council as their
City Government Affairs Director.
IEC, we represent nearly 130 environmental orgs across
the state, including many that are here in the room today that work on
environmental policies here in Chicago.
And I want to talk about this data center report.
First, I want to say thank you to Committee Chairwoman Hadden for hosting this
hearing. Second, I want to thank the Sustainable Data Centers Working Group
for putting together this timely report.
As artificial
intelligence continues to be widely adopted, we are seeing an unprecedented level
of data center expansion. Chicago specifically being along Lake
Michigan and experiencing long, cold winters is an ideal place
positioned for data center expansion.
And while there are already data centers here in Chicago, 39 to date, the
city's current policies and regulations related to them are far
outdated and do not reflect the growing demand of AI.
Data center zoning is currently classified in the same category as office
buildings, and it can be permitted by right, meaning they experience a
streamlined approval process and does not require public hearings or special
conditions, of course, depending on the size.
While some data center construction may trigger the plan development
process that does include public comment,
all data centers, regardless of size, location, et cetera, should
require input from the public and the local alderman.
Related to zoning, in a city where we have one of the highest asthma rates in the
country and we are experiencing more heat waves, we need additional
regulation for diesel backup generators.
These generators not only increase greenhouse gas emissions, they also release
large amounts of pollution during peak hours and emergencies.
They are also a major source of noise pollution when generating up to 105
decibels, which is basically comparable to a jet flying
overhead. Equally, we need renewable energy
requirements for data centers. There are existing
battery storage technology that can replace diesel generators and
provide cleaner, quieter, and more reliable power backup.
We also cannot talk about data centers without recognizing their electricity and
water demand. Chicago's already experiencing brownouts and aging
infrastructure with high summer demand.
When we have these large data centers that cluster in neighborhoods, they intensify
the strain on the grid. We also know that there are
water impacts from data centers as well.
Lake Michigan is vast. However, we are already seeing an increasing number of
suburbs that are seeking water from the lake from the City of Chicago, and we have
residents who cannot afford their water.
At minimum, we deserve transparency around
data center water and energy usage.
Finally, this report
is a long time coming. Almost two years ago, IEC and our partners worked closely
with Alderman Villegas, whose leadership on this has led to the consideration
of environmental challenges for future data center approval, and we also thank him
for his expressed support of the POWER Act.
With this, we hope that the data center report will in-
You almost made it.
Our next speaker is Mr. George Blakemore.
One, environment is very important.
Historically, pollution and
waste have always, and these data centers or
whatever, have always been in the poor
neighborhoods.
The poor neighborhoods. The rich, they don't have this
problem.
Did you know the rich live longer than the poor, too?
And they get all kind of benefits. So the negative
effect that these data
centers have on the poor, particularly poor Black
people.
Poor Black people. I have seen this happen
on the North Side with these steel mills leaving
the Lincoln Yard and going to the 8th Ward.
Well, the Black ward.
So Black people, you should have a
vested interest in these data
centers, and see how many of them will be placed
on the Gold Coast
in the rich areas. See, America has
rich
and poor people. America have Black and white
people. People that was enslaved in America.
Enslaved in America. Not God bless America,
but God didn't bless these Black people came over here.
Now I'm giving you a little history.
So when they get ready for these data centers or
daily
whatever, or whatever, Mr. Blakemore, be more
articulate. They going to put them in the
hood, in the poor areas,
not in the rich.
In a capitalist system, the golden rule is he who has the
gold. This is not a democratic system.
They all here are Democrats. They're not talking about that big H white
man, Trump.
Right here is racism, nepotism, corruption.
Right here. So these
centers will be placed in the
poor Black areas.
Why not? Why not in the rich areas? In the
rich white areas? They're looking at me. Why not?
So that's why it's very important for a man of Mr.
Blakemore caliber to come to these meetings, to call them out.
Waste, fraud, and abuse. Well, it goes on here.
Racism with these data centers, where are they going to be
placed? And this is only subject matter
only. When you know better, you do better.
They will be placed in these poor
areas, poor Hispanic areas, poor
white areas, poor Black areas, so that-
Thank you, Mr. Blakemore. Next up, we have Henry Winston.
And I'd like to recognize Alders Cruz and Ramirez for
purposes of quorum. Thank you for joining us.
Hi, my name's Henry Winston. I'm a resident of Chicago, and I'm here representing
Sierra Club.
We're very concerned about data centers in the city,
especially as the fight continues throughout the state
Speaking on the same issues that have already been brought up, we're concerned
about the effects on the energy grid, and we would like to see
prioritized data centers bringing their own clean energy onto the grid
to operate off of.
Like Ayana brought up, Chicago is already experiencing issues with brownouts.
We saw New York have significant brownouts
as the
load increased on their energy grid with summertime heat
waves. That's an issue we'll only see increase with climate change, and we're only
going to increase the load on our already aging electric grid
infrastructure. And so we think it's of the most importance that
these new data centers are bringing their own clean energy to operate off of.
Also with water, making sure that there are publicly
available information and clear reports and robust
enforcement of those metrics. Sierra Club just last year sued
the Trump Tower downtown for improper
maintenance of their water system and pulling in too much water from the Chicago
River. So we've seen that if
the buildings in the city are not held accountable, that they will abuse
our natural resources.
Also speaking on land use, data centers provide jobs in the short term,
but in the long term, they provide very little economic opportunity, and they're a
permanent land use change in the city.
And we're also worried about potentially overbuilding our concrete infrastructure
as computing capacity keeps getting smaller.
What is the city going to do if we have multiple data centers taking up massive
tracts of land that we have to tear down because they have no current usage
anymore?
So we'd like to see robust shutdowns and a lot part of putting
those stops in place is also having transparency with the community and
having community meetings and guarantees of CBAs.
If we're going to be bringing noise pollution and potentially air pollution into
these communities
because they're supposed to see some type of reward and tax incentives,
or that they get that on the back end, we have to see those
CBAs secured for those communities.
And we are very concerned about the usage of those diesel generators to secure
that 24/7 operation for data centers.
And we know that is heavily related to asthma in communities.
So
Sierra Club would like to see the fight on environmental issues continue
along with community transparency and government
accountability. The fight is happening on the state level, but we need to make sure
these occurrences are happening on the local level.
There are state legislators across the state who are signing NDAs to have
conversations with data center developers under the guise
of them disclosing proprietary information, and we need to see practices like that
stopped and we need to see practices like that prevented against in our city
officials. Thank you so much for your time today.
Thank you.
Our final speaker is Jane Goldenberg.
Hello.
My name is Jane Goldenberg. I'm a resident of the 44th Ward and a member of the
Chicago Metro chapter of the Climate Reality Project.
Thank you very much for taking up this critical issue.
As we've already heard, data centers pose a multiplicity of environmental and
economic challenges. They also present a significant obstacle to our city
achieving the goals outlined in the 2022 Chicago Climate Action
Plan to significantly reduce greenhouse gas emissions from buildings.
The fast expansion of data centers supplied mainly by nuclear
power is overwhelming our energy supply.
As a result, there is more pressure to add power from methane gas backed by
diesel generators, the worst of the worst for local particulate pollution.
Chicago data centers should be required to get their power from renewable
energy to protect the livability of our planet and our air
quality. We are already suffering harmful impacts from
climate change, such as heating and flooding, as well as threats to our
wildlife and ecosystems. The air quality is threatened by the
dirty emissions from fossil fuel vehicles, our air quality, and regional
polluters such as the three steel plants in Northwest Indiana.
According to Climate Trace, those three steel plants are the third, fourth, and
fifth largest emitters of greenhouse gas emissions in our region, not to
mention their noxious pollution.
Our top regional source of greenhouse gas emissions is road transportation,
and second, residential buildings.
The upshot is that the pollution from data centers or steel plants doesn't stay
put. This is a regional issue, and Chicago should actively be working with
legislators in the General Assembly to pass the Power Act.
Estimates vary about the number of data centers in Chicago, with many concentrated
on the South Side, which as we have heard, many projects due to come online in
our region are planned for the suburbs.
All of these threaten the ability of the grid to keep up with demand.
Goldman Sachs projects electricity demand for US data centers will double by
2027. As of 2025, data centers account for
2% of total emissions. According to the report, the pressure on our grid will
intensify in the summer, when their share of total US peak power demand is
projected to jump to 8.5% in 2027
from 4.2% in 2025. This is a time our grid is
already under great strain. Of course, data centers are only one significant source
of greenhouse gas emissions. To put this into context, another concerning
growing source of emissions is petrochemical production, primarily for plastics,
but also for fertilizer. These emissions already account for 5% of total
US greenhouse gas emissions comparable to the entire national footprint of
Poland. A study by the Rhodium Group projects those emissions could grow by
one-third from 2023 levels by 2030.
Estimates vary, but as much as 40% of plastic production is for packaging, much
of this for single-use plastic. At the end of the day, your actions on data centers
as well as other sources of greenhouse gas emissions should be driven by concerns
about affordability, the safety of our air and water, but also about
our climate. That is the quality of life for our children and
grandchildren. Thank you for the opportunity to speak
today.
Thank you, and thank you to all of our speakers today.
That concludes our public comment period.
I would like to note that the committee received one written public comment that
has been emailed out to committee members via
city email. Our first order of business is our Rule 45
report from May 11th, 2026, which was distributed to the
committee. Could I have a motion to approve that May Rule 45
report?
All right. Alderperson Romero so moves. All those in favor say aye.
All those opposed say nay. In the opinion of the chair, the ayes have it.
To the meat of our meeting today. So our
only agenda item is the subject matter hearing on a report from our
Department of Environment regarding the environmental and energy impacts of
data centers in Chicago. This report was triggered by the passage
of
SO2024-0008201,
which set requirements for the city data to be processed, stored,
transmitted, and,
yeah, disposed of within the United States.
It also provides preference to bidders with our Department of
Procurement Services for data to be stored in data centers located
within the city of Chicago or the state of Illinois.
The second section of that same ordinance triggered this report,
which convened the Sustainable Data Centers Working Group to analyze the
impacts of data centers and make recommendations for city council to
consider as the proliferation of data centers accelerates across the
region.
Currently,
we have approximately 39 data centers in Chicago, with Illinois
having some of the largest numbers of facilities and the highest power
consumption in the US. The explosive demand for AI
has driven the expansion of data centers nationwide.
Chicago is seen as an attractive market for data centers because of our skilled
workforce, our fiber optic network, our central location, energy
infrastructure, proximity to fresh water, and other things that you all mentioned,
many of you know. And of course, we're the best
city. We know this, but we connect both US coasts
and serve as a major financial hub with strong growth, which is why our region is
seeing increased interest.
As we see this expansion continue across the region, municipalities have addressed
data centers with mixed approaches.
While some have embraced data centers, touting their economic development
opportunities, others have seen neighbors turn out in large numbers in
opposition to new data centers in our communities.
Some municipalities have issued moratoriums or imposed legislative
actions to regulate data centers in their communities,
and the Sustainable Data Center report includes a table of legislative
actions taken by cities across the US.
You'll find it in the appendix, starting on page 55.
The expansion of data centers and data center adjacent facilities
presents environmental consequences due to the high energy and water
consumption, which we'll learn more about during today's hearing.
We've also seen utility ratepayers see significant increases in monthly electric
bills due to increased demand that data centers are putting on our grid.
Today, we'll hear from our Department of Environment, the Department of Planning
and Development, and a panel of experts who will share results from the report
and provide insights into how cities and regions are addressing the
issue and facilitating dialogue on potential legislative
avenues so that we can protect and
benefit for all Chicagoans.
Ahead of today's meeting, we did email the Sustainable Data Center report from the
Department of Environment to committee members to review,
as well as extended an invite to committee members for the Committee on
Economic, Technology, and Capital Development.
I'll say, as we are about to hit another heat wave,
many of you know, certainly our panelists who are here, many who are
in the audience who have attended committee hearings before,
we find ourselves
urgently trying to take action, and I think
one of the things that we try to use the committee here for is to
bring the urgency we're feeling, right, from the heat
waves, from
the changes we might be seeing in other cities and
municipalities. I think
I've observed a lot of concern. I think very legitimate concern and, in
some cases, fear as we see
technology moving faster than we
can legislate,
as we see development sometimes happening faster
than we can legislate. And as we've seen, I think maybe not yet
here in Chicago, but in other places
where the process is opaque, right?
Where all of a sudden,
four football fields of land are taken up and
energy and water are promised through a sole source process
and community members don't see. And while again, we haven't had
that happen here in Chicago, I think that everyone gathered
here and with the purpose of the report, that's really what we're trying to
address.
From data centers to other
large developments, we really appreciate you, Commissioner Tovar, and your
team,
helping us to answer these really difficult questions. How do we as a city grow?
How do we have economic development?
How do we keep up with technology? How do we stay relevant
and central in our city? And how do we do it without
repeating the same environmental mistakes and
harms that have happened to our communities in the past, without
overburdening people while making safe and sound decisions,
while setting guidelines first Before
diving in to
just another boom. So, really appreciate you guys to be here.
And for everyone that's here, this is an opening conversation.
I don't imagine it will be our last conversation as we try to just
grapple with these questions. So,
joining us today we have Commissioner Angela Tovar, Deputy
Commissioner Paula Cicchiao, and Jared Patton with the Department of Environment.
We have Sarah Moskowitz with the Citizens Utility Board, Andrew Wren with
Prairie Rivers Network, Kavi Chintam with Vote Solar, and Craig Huffman with
MetroEdge. Bradley Roback from the Department of Planning and Development
is also joining us today. Thanks for being our flank over
there. And we can all shift in a little bit more too, when as
needed.
So, he's here for the Q&A portion of the meeting.
So following all panelist testimony, we'll have time for Q&A for members.
And with that, I'll turn it over to our panelists to more fully introduce
themselves and start their presentation.
And we'll start with you, Commissioner Tovar.
Good morning, Chairs Hadden, members of the committee, and members of the
public. My name is Angela Tovar, and I'm the Chief Sustainability Officer and the
Commissioner for the Department of Environment.
I want to first thank Chair Hadden for her leadership, and the opportunity to
present the recommendations of the Interdepartmental Sustainable Data Centers
Working Group.
One of the city's fundamental responsibilities is to protect the
health of our residents and the infrastructural and natural resources
on which our communities depend.
As data centers continue to expand in Chicago, it is critical that
our regulatory framework keeps pace with their demands on our
energy system, water resources, air quality, and
surrounding neighborhoods.
Chicago's climate commitments and sustainability goals require us to
proactively address these impacts before they become more
difficult and more costly to mitigate.
The recommendations before you are intended to strengthen environmental
protections, improve accountability, and ensure that future
development better aligns with the city's sustainability
priorities while ensuring that our economic development goals continue to
advance responsibly. Next slide.
We'll begin with why this work was necessary.
We'll then provide background on data centers in Chicago and the environmental and
community impacts associated with their growth.
Next, we'll discuss the working group's process and the extensive engagement that
informed these recommendations.
Finally, we'll present the working group's recommendations for strengthening
Chicago's regulatory framework.
The first portion of today's presentation provides context before we discuss
each recommendation in greater detail.
The next slide, sorry. The city did not undertake this effort in
anticipation of future challenges alone.
We undertook it because residents, policymakers, and city
departments recognized that existing regulations have
not kept pace with the scale and impacts of modern data
centers. The next few slides explain the problem we set out to
address, the process that we followed, and the recommendations.
Data centers are expanding rapidly in Chicago, and with that growth comes
significant environmental impacts.
These facilities can consume substantial amounts of electricity and water,
contribute to greenhouse gas emissions through increased energy demand,
and create persistent noise and diesel air pollution in
surrounding communities.
Many of these impacts are borne most directly by residents
nearby, making thoughtful regulation both an environmental and
quality-of-life issue.
Chicago's current regulatory framework was not designed for today's
modern, more resource-intensive facilities.
The working group was charged with identifying practical policy
changes that better protect public health, infrastructure, natural
resources, and community quality of life.
The working group approached this effort, next slide, sorry, with a
simple question. What policies are needed to better protect
people and the environment as this industry grows?
For over about 18 months, city departments worked alongside technical
experts, utilities, community leaders, environmental
experts, Chicagoans with lived experience, and industry
representatives. Throughout this process, Chicagoans consistently
emphasized concerns about air pollution, noise, water
consumption, transparency, and environmental justice.
Those concerns helped us shape the recommendations before you today and
reinforced the need for stronger environmental oversight.
Next slide.
The working group's recommendations are centered on prevention,
accountability, and environmental protection.
They call for stronger safeguards to reduce pollution and better protect
nearby communities. They recommend updated zoning
policies so environmental impacts are considered before
facilities are approved for construction.
And they establish greater transparency around electricity and
water consumption so the city can better understand the
impacts and make informed decisions on the future of our water and
energy use.
Collectively, these recommendations recognize that public health and the
environment must remain central to how
Chicago manages the continued growth of data centers.
Before discussing these recommendations, next slide, it is helpful to understand
what data centers are and why their impacts have become an important environmental
policy issue. This will be covered by Jared Patton, the project
manager at Department of Environment.
This next section provides the background and explains why the working group
concluded that updates to Chicago's
regulatory framework are warranted.
We'll then return to the recommendations and discuss each of those in detail.
Thank you.
All right. Hello, everyone. Thank you for that introduction, Commissioner Tovar,
and thank you to the committee for having us here today.
We definitely appreciate the opportunity to share the work that we've been up to
for the past year and a half.
As Commissioner Tovar mentioned, I will be providing an overview of data centers
generally before-
Chair, are you able to move the mic a little closer?
Yes, I can. Is that better?
Yeah. There we go.
Okay. Sorry about that.
For the recording.
All right. Well, thank you all for having us here today.
I'll be providing an overview of data centers generally, and then our working group
process specifically, and I want to start by providing a working definition of what
we mean when we say data centers to make sure that we're all on the same page.
Throughout our process, we have thought of data centers as facilities that house
computing equipment used to store, manipulate, and process digital
information. Importantly, data centers can be standalone facilities
that were purpose-built to function as data centers, or they can be one part
of a larger mixed-use building, for example, a couple of floors on a mid or
high-rise building.
And it's important to keep both of those types of centers in mind as we go through
this conversation.
So, this is the definition. I think it's also helpful to look at some pictures so
you can visualize what a data center is.
So this slide shows the interior of a data center, and these facilities
house rows and rows of server cabinets that contain the computing equipment, the
processing chips, all of the material in interconnected
rows. This equipment is highly
specialized. It's expensive. But from an
impact perspective, we are most concerned not with the computing equipment itself,
but with the systems that enable that equipment to function.
And specifically, we're talking about cooling systems and generators.
And to get an idea of those systems, I think it's helpful to step outside of the
building and look at it from the exterior.
So this somewhat grainy image here is an aerial Google Earth image of a
data center in northern Virginia.
For this presentation, I'm going to be using examples from outside of our region so
we can focus at the policy level and not get hung up on the details of any specific
site.
And there are a few things in this picture that immediately tip us off that we're
looking at a data center. The first are all of these vents and
fans and air compressors on the roof.
This equipment is part of the cooling system.
Data centers use a tremendous amount of electricity, and that electricity
gets converted to heat. To keep the microchips processing or
functioning, you have to remove that heat and push it outside of the
building. These cooling systems function any time
the computing equipment is functioning, which is typically 24
hours a day. So it produces a large amount of low volume, constant noise.
These cooling systems can also use a lot of water depending on the type of system
that's in place, and they also use a lot of electricity.
In some cases, 40% to 50% of the electricity used in a data center does
not go to powering the chips themselves, but rather keeping those chips cool.
The next thing I want to highlight are these boxes that almost look like
semi-trucks docked into the facility.
These are industrial-scale diesel generators.
Data centers sell themselves on their ability to provide continuous, uninterrupted
power 24 hours a day, 365 days a year.
And doing that requires one-for-one power backup, and today that
almost always means diesel generators.
Fortunately, we live in a region with a fairly secure grid, so these
generators rarely power the facility themselves, but every unit must be
tested once a month, and that test can last from minutes to hours,
depending on what is being tested.
And because diesel generators are dirtiest during the ignition process,
this can produce a plume of diesel exhaust that is noticeable
to people in the area, and it contributes to air pollution.
Testing can also be quite loud.
If you look closely, you will also see fuel storage tanks.
If you're going to have several dozen diesel generators, you need to have fuel
on-site to operate them. So you'll often see on-site fuel storage.
And then finally, in the background, you can see this substation.
Data centers use a lot of power, more power than is typically available
in distribution lines. So they're typically located along
high-capacity transmission lines.
The electricity in those lines is at a higher voltage than the facility can use, so
they need to have a step-down substation that converts it into a usable
form. This equipment takes up a lot of space, and it's also quite
expensive, and that's one of the reasons why we have seen electricity price
increases in recent years.
So, this is a typical purpose-built data center, and we have several
facilities that look like this in our city.
You might be looking at this picture and thinking, "That's not what Chicago looks
like," and you're correct. In most cases, Chicago is denser than this,
and for that reason, I want to also share examples of urban data centers.
So this facility is located in downtown Boston.
If you look closely at the building in the center of the image, you can see a lot
of the same features from the last image are also present here.
We have cooling systems, we have generators, but it's in a much more compact
footprint. One of the big apparent things that you see when you look at this is
that there are a lot more impacts when you're building in an urban area.
Neighbors are closer. You can't have vegetative buffers, and that is, in fact, one
of the things that we have heard from residents.
Here's another example of an urban data center, this one coming from Charlotte,
North Carolina. This is more of a mid-rise development.
You see a lot of the same equipment on the roof, but what I want to draw your
attention to here is the gap between the two buildings.
That's a generator yard. There are several diesel generators at ground level,
which is an attractive option for data center
operators because it's cheaper, faster, easier to maintain,
build, and service generators at the ground level, but that produces a whole
another range of impacts for people in the nearby area.
So you may be wondering, why would you build a data center in Chicago?
Why are they being built here? There are a few good reasons for that.
One is proximity to users. Chicago has a lot of people and a lot of
businesses, and the closer a user is to the data center that is housing the
software they're using, the faster that software will function.
For example, if you're streaming a video, it will load much more quickly if it's
being stored in a data center in our region rather than the other side of the
country or the other side of the world.
That's even more important when you talk about high-demand, complicated software
that's processing a lot of data, operating things for purposes
like operating remote machinery, real-time data analysis,
automated services, things that are more of a commercial use.
For those uses, proximity is very important.
Additionally, City of Chicago has a lot of great infrastructure that data centers
want to take advantage of, especially our access to long-haul fiber optic
lines. The nation's fiber optic system was built following
existing transportation and utility corridors, especially railroads and
highways. And because we're a hub of both of those
systems, we're also a hub of fiber optic connections.
That is very expensive infrastructure to build, so if you build a data center
directly adjacent to it, you can save a lot of upfront construction costs.
The City of Chicago and the Great Lakes region also has abundant and relatively
cheap water. There are, of course, concerns for sustainability in the
region, but we charge much less for water than what is charged in more
arid parts of the country. Then finally, electricity.
We have historically had plentiful and clean electricity, which is very
attractive to data center developers.
I should note that electricity is also a constraint on the size of data centers
that can be built.
It is very difficult to build the amount of electricity infrastructure that's
needed to power the largest gigawatt scale data centers.
And as a result, the data centers built here tend to be more on the small to medium
size. Then finally, a highly skilled workforce.
Data centers are precision facilities.
It takes a lot of skilled electricians, engineers, IT
professionals, construction workers to build these facilities.
It can be difficult to assemble those project teams in more rural areas, and that's
not as much of a concern here in Chicago.
All right, where are our data centers located today?
Most of these facilities in Chicago are centrally located.
The South Loop is probably the biggest hub.
There are also a number of data centers that are built following utility corridors
leading to downtown. In both of those cases, they are sited there to take
advantage of the infrastructure that's available, specifically fiber optic
and electricity.
Most of our facilities are colocation or enterprise data centers, which is to say
they are not AI training facilities.
We do not currently have any of the gigawatt scale AI training centers in
Chicago.
A colocation facility means that a developer has built a facility,
and they rent out some or all of their server space to other users so that
a business that wants to use a data center doesn't have to build their own.
They just rent space. We have many of those here.
And the final bullet point on this slide, Chicago's land use patterns and
population density require thoughtful policy solutions.
This is just an acknowledgment that we are not suburban Chicagoland, we are not
northern Virginia, and we can't just copy and paste what other people have done
here. We need to be really thoughtful and really careful to make sure that all of
our recommendations are tailored to the specific context here in
Chicago.
Okay, so how are we regulating data centers today?
Our zoning ordinance classifies data centers as electronic data storage
centers, and they are permitted by right in all commercial districts, all
manufacturing districts, and some business districts.
In practice, about half of the data centers that have been built here have gone
through the planned development process.
That's not because PD review is required, but because they are hitting other
triggers related to their location or their size.
Aside from the zoning process, there is currently no data center specific permit
that a data center needs to receive in order to operate.
My last few slides in this section focus on the specific impacts of data
centers, and many of these have already been mentioned by other speakers today.
One of the biggest concerns comes from price increases for electricity.
The chart on the right side of this screen highlights the changes in
demand in electricity in recent years.
From 2000 to about 2022, the United States saw
relatively flat demand in electricity, and that changed drastically a few years
ago. We've already seen a small spike, but we expect to see an even greater
spike in the coming years, and that's the right side of that chart.
This demand has a direct impact on electricity prices
because a good portion of our electricity bill is established by a
capacity auction that takes supply and demand into account.
There are also concerns for grid
stability. Data centers use a lot of electricity in a very small
footprint. In some cases, you're using as much electricity as an entire
city in just a few blocks. Our grid wasn't built for that, so it takes a lot of
planning to retrofit it. But the biggest concerns are at
times of peak demand. When you have a heat wave or other
disruption to our power system, there can be concerns about demand
outstripping supply. And what we are likely to see here is not
a blackout across the whole city, but rather data centers being kicked off of the
grid. And when a data center moves the grid, it doesn't necessarily mean that it's
shutting down. Instead, it means they're converting to that backup diesel power.
And in a worst case scenario, that could result in several hundred megawatts of
diesel generators operating in dense urban areas at a time of
extreme heat when there are many other concerns people are dealing with.
And then finally, all of this electricity has to come from somewhere, and we've
already seen data centers prolonging the lifespan of fossil
fuel power plants, and that's a major concern moving forward.
In many cases, data centers have funded new, clean, renewable
energy. They're one of the biggest funders of clean energy today.
But that is not a requirement, and we are seeing a lot of
power plants stay online to support them.
The next impact is air and sound pollution.
This is the biggest concern that we hear from residents through 311 complaints.
If someone's making a complaint, it's almost always because the data center nearby
is loud or it's dirty. Sound comes from cooling systems that
operate at a low level around the clock, as well as from
generator testing, which is a shorter period but more intense sound.
Air pollution comes from diesel generator testing, and,
as I mentioned previously, these generators are dirtiest when they turn
on.
If you have several dozen generators, even though you only test each one
once a month, you'll often be testing several in one day.
And then finally, water. This has already been mentioned a couple of times
today. The amount of water a facility
uses really depends on the cooling system in place.
We have a statistic on the slide here that an average data center uses as much
water as 1,000 households, but it is really hard to pin down what an
average data center is. The centers that use
evaporative air cooling are some of the most intense water users in the
country today, at the same level as power plants.
While other facilities with more efficient equipment use less water.
And I mention this because of the final point.
There is no requirement for water usage transparency, and that creates this
interesting bifurcation where, depending on who you talk to, water is either a
huge concern that needs to be addressed or it's not a problem at all, and it really
complicates the policy-making process.
So that is the conclusion of my overview of data centers, and I want to move
briefly to highlight what our process for developing this report has
been. And I'll begin with a quick timeline.
So as was previously mentioned, this work started with a city ordinance passed in
the fall of 2024. We began meeting as a working group in
January of 2025 and have continued to have meetings for the past
year and a half. In those early meetings, we explored what a
data center is, what those big impacts are, what is most important for us as the
City of Chicago to address, and then transitioned to having more
conversations about recommendations and what are the tools at our disposal
for addressing some of these impacts.
Along the way, we did quite a bit of outreach, which I'll speak to in a moment.
That included an industry roundtable earlier this
spring, and a
community meeting in May of this year.
We released our report earlier this month and are here today to share our
findings.
Our working group has been interdepartmental in nature, with representatives from
the Departments of Environment, Planning and Development, Public Health, and
Technology and Innovation.
A little more information about the outreach.
We really focused our outreach on
speaking with people who had more experience working with data centers than we do,
or certainly have more experience in specific topics related to data centers.
We casted a wide net. We spoke with businesses.
We spoke with government agencies, policy people,
academics, community groups. We wanted to get a wide range of
opinions. Those engagements included informal
conversations, roundtable discussions.
We invited people to attend our working group meetings.
We hosted conference meetings. We had webinars.
A whole range of engagements. We
also hosted an industry roundtable, as I previously mentioned.
That included roughly a dozen people from businesses and
industry-affiliated organizations.
We discussed the current status of the data center industry in Chicago, as well as
the future. We discussed some of the concerns that had come up and opportunities
for addressing those concerns and really maximizing the benefits of data centers
while mitigating those impacts.
And then finally, we had a public meeting this past May.
That was our community conversation on data centers.
It was held at Arturo Velázquez Institute.
It featured a panel discussion with several of the people who you'll hear from in a
moment today, as well as an open house where attendees were invited to share their
perspectives on a wide range of data center questions.
You can see a couple pictures from that meeting on the slide here, and there is a
detailed overview of what we heard, not just at that meeting, but in other parts of
our process in the appendix of our report.
Before I stop, I do want to highlight a couple of the things that we heard during
that public meeting. There was widespread concern for air quality and
sound, which aligns with what we've heard through 311.
But there were also concerns about environmental justice, water, and then
finally, transparency. And that means transparency not just about the impacts, how
much water a data center is using, how much air pollution are they producing, but
also the process through which data centers are approved and built.
And then finally, there was broad support for additional regulation on data centers
within the city.
And that concludes my section, so I will now hand the microphone over to my
colleague, Jared Pelliccio.
You're getting double Jareds today.
Thanks, Jared.
So I'm Jared Pelliccio. I'm the first deputy here.
I'm going to just close us out by circling back to where
the commissioners
started with, which was the key
recommendations that the
working group delivered to the committees in submitting our
report. So if you want to go to the next slide.
So like the commissioner said, we have three
actionable recommendations that I'll talk about
one by one right now. And then following that, you'll see
that we also have several additional
recommendations of actions that require further research
and due diligence, but rose to the top of the working
group's
consensus as other items that should be evaluated.
The difference being the three that you see on the screen here,
the will of the working group is that these are
action items that, in our opinion,
council and the administration should begin considering
specific
development of language and policies.
Whereas the second set that you'll see after that are a set of
items that seem very promising but require some further research and evaluation.
So I will go to the first of the main three
recommendations. And
hopefully you were listening to the first part of the presentation because this
will build on a lot of the learning that we
gained over the past year and that Jared
ably presented over the past few minutes.
So the first recommendation is strong environmental safeguards.
As you heard, one of the consistent things that we heard from
neighbors of facilities is concern about
air and noise pollution and its effect on public health, on the environment, and on
quality of life. And so that's what this recommendation is designed
to responsibly address. This would
occur through the city's
Environmental protection part of its code, and then regulations rules
that are used to implement that part of the code.
This really is designed to address how data centers
operate. You'll see in a second, we'll move to zoning.
And so this is, as you see on the screen, the
details here, if enacted, would apply to both new and existing
facilities that fall within a
definition of a data center in
revised environmental protection parts of the code and any
regulations that then also need to be enacted to
implement those parts of the code.
The good news here for all three of these recommendations, and for this one
specifically, is that we did a ton of peer benchmarking, as you heard,
and there are actionable things that can
be done to improve the effects of air pollution from
generators, and noise from
facilities. There are things that can be done here, and the idea would be to
work out
details through revised environmental permitting
requirements related to those impacts.
So I'll go to the next recommendation.
So the next recommendation regards responsible zoning and land
use. I think
absolutely one of the top-line conclusions of the working group was
that the existing zoning requirements
for data centers
are to a large degree outdated and need to be
modernized to meet the current state of the industry.
As Jared Patton talked about,
the nature and the intensity of data centers has changed over time.
And our recommendation is that our zoning and land use
requirements need to evolve and modernize with those changes.
So this would occur through amendments to the zoning code.
And
the recommendation of the working group is that there's a
series of aspects of the zoning code that could be
modernized and specifics could be developed
working with partners like DPD, who we've been alongside of during this
process. That includes everything from use standards
to siting requirements, thresholds that could trigger
things like a planned development process
or sustainable development policy requirements.
And along with those substantive changes, additional
changes to how community-- Oh my gosh.
All right. We're going to take a brief recess. Brief recess.
No, wait, we need to stop.
You need to stop?
Yeah, she's on the phone. But we should continue the presentation.
Oh,
911?
We're calling 911.
Yeah. Who wants to-
This is great.
Don't
worry about Sam. Here. Yeah, well done.
It looks like she's-
Thank you. It's automatically going to record.
Oh, sorry.
Hello, Sergeant. Arms just passed out in room
2018.
All right. We'll reconvene.
She's getting medical attention, just for everybody to know.
All right, please continue.
Okay. Thank you, Chair.
So I'll return and recap this
item.
So we first talked about potential changes to environmental
permitting that addresses public health, environmental, and quality of life impacts
during operation. This proposed policy change of the working
group addresses modernizing the zoning and
land use designations for data centers.
And we talked extensively about
the
changes that have occurred in the industry.
There haven't been parallel changes to our zoning code
as well. So, the recommendation here is
to be very specific, changes to the zoning code, part of the municipal code
amendments to the zoning code. There are a number of actionable things
that can be done here. Use standards can be added to this particular
use type. Changes could be made to siting
requirements. Changes could be made to the threshold
of certain additional reviews, so the threshold for
a planned development review, the threshold for
potentially data center-specific sustainable development requirements
And then in addition, you've heard both from us and then
also from the chair
about a clear desire on the part of
members of the public for additional ability to engage in process
related to development of these facilities.
So, our recommendation is when we're thinking about the substantive
changes to zoning standards for data centers, also to think
about additional community engagement requirements at that time.
So that's the second major recommendation,
and then the final is transparent data reporting and accountability.
When it comes to this one, this is
one where Chicago is poised to really be able to take action quickly here if
the council so chose. And that's because, as many of you all may
be familiar, we have an existing program here called the
Chicago Energy Benchmarking Ordinance.
This is an ordinance where buildings of a certain size are
already required to report their energy usage, through a
very standard platform used across the country called
Energy Star Portfolio Manager.
That platform also allows for water reporting as well.
And in fact, it's a voluntary option even today for
Chicago buildings. So,
of the three of these major recommendations, this is by far the easiest to
just fit on one slide, so to speak. What the working group is
recommending is simply better data on
how these facilities are impacting
energy and water in Chicago. And there's an easy way to do that, which is
to change our energy benchmarking ordinance to require that they
do so. Of course, we would have to work out the specifics of the type of facility
that has to report and
ensuring that there's a way of identifying those facilities to enter into our
database. But it's very easy to summarize in one slide the path
forward for this particular
of the three major recommendations.
I will now go to what I mentioned earlier, which is five
additional items that rose to the top absolutely of
our work, but require continued action and
continued evaluation, as opposed to the first three, where
we recommend
that the council and the administration consider
specific policy development immediately.
So those five are looking at
how the city
sets its rates for industrial uses, including data centers, but
this would obviously involve a look at other
uses of industrial facilities that utilize
Department of Water Management-provided water. So that's the first one.
Second one is obviously kind of wrapped up in that same conversation, which
is encouraging greater water reuse.
If you do follow this industry, you'll see a lot of talk about
creating ways to use what's called gray water, which is water that's
already been treated, as opposed to potable water.
There's a lot of room for innovation.
And in fact, as you all probably know, Chicago's a leading innovator in the water
space. Our recommendation is that
we should really take a close look, along with partner entities
here in the region, as to how we could encourage
pilots and full implementation of water reuse strategies.
Third is again another of those sort of circularity concepts, which is,
as Jared Patton talked about, these facilities generate a tremendous amount
of heat. There is an entire industry in
industrial engineering that focuses on
reusing heat from industrial facilities to generate
power and energy with that heat.
And so there's a lot of opportunity here.
Again, this wouldn't be something novel solely to the data center world.
It would be a matter of pushing for innovation and
pilots within this space, building on waste
heat strategies that have been used elsewhere geographically and in
other industries.
Fourth, you'll hear in a second,
as I pass the baton to the other panelists, you'll hear in a second about
strategies for ensuring that communities that host data center facilities
receive benefits themselves. And so
that was a clear message we heard
both in our community meeting and
in discussions with various other stakeholders over the past year.
And five is kind of just a catchall.
So I'm going to pass the baton in a second.
So with that, we thank you for
attending our Data Centers 101 class over the last few minutes.
We're excited to answer any questions that you have.
But we're also excited to hear from a bunch of really great
panelists who have additional perspectives.
And as we close, that's the list of folks here at the city that
generously gave their time in participating on this working group.
Fantastic. Thank you so much. Thank you to the Department of
Environment for that presentation.
And for committee members, don't worry, and the public, these slides will be made
available publicly, if you couldn't get all your screen
grabs just yet. All right, now we'll hear
from Sarah Moskowitz from the Citizens Utility Board.
And
you're a pro at this, but don't forget to bring that pole, you can move that mic.
Thank you.
Is this on? Yes, it is. Great.
All right. Thank you, Jared, for setting me up
here. I hope not to be too repetitive.
And thank you to Chairwoman Hadden and members of the committee for allowing me
to speak today. I'm Sarah Moskowitz.
I'm Director of the Citizens Utility Board, or CUB.
We are a utility consumer advocate working throughout the state of
Illinois. And for the past several months,
my CUB colleagues and I have been traveling the state,
speaking to rooms packed with people- Absolutely
livid about data centers. Data centers have
really become a focal point for a broad set of concerns,
including environmental impacts like air and
noise pollution, questions about corporate accountability,
along with deeper anxieties about what artificial intelligence means for
our jobs and for the economy. But I was invited today to talk about
the impact data centers have on electricity costs and examine
possible solutions to protect everyday customers from shouldering
the bill for big tech's energy needs.
Data centers have been around for many years, but
AI is now driving a trend toward larger,
more power-hungry facilities, the largest of which can
require the same amount of electricity as a medium-sized city,
although not the ones we're seeing so far in Chicago,
obviously. Our electric bills have already gone
up because of data centers and will continue
to do so unless policymakers at multiple
levels take action. To drill down on how this works just a little bit,
Illinois is a restructured state, meaning that our local
distribution utilities, like ComEd, do not own power
plants. ComEd doesn't generate the power that they sell to
us. ComEd makes its money off of building and maintaining the
infrastructure to deliver the power to us locally.
The price for the electricity, the juice itself now,
that is set by wholesale power markets, and the one that serves
ComEd's territory is called PJM, which spans 13
states from here through the Mid-Atlantic, including Virginia and Washington,
D.C., Pennsylvania, New Jersey.
You can see the distinction on your ComEd bill.
I forgot to bring my ComEd bill, but there's a part of your bill labeled delivery,
which is overseen at the state level, whereas the supply portion of your bill is
the part that's more directly subject to the vagaries of the markets, which are
ultimately overseen by the Federal Energy Regulatory Commission.
Data center costs are hitting us in both places.
To start, we have the higher delivery transmission charges to cover data
center-related grid upgrades. In an Illinois Commerce
Commission proceeding currently underway, we just found out that
since 2021, ComEd has spent more than
three billion, billion with a B,
dollars to connect large facilities to the system.
Most or all of those were data centers.
The deposits that ComEd collected from those customers,
however, only covered about 25% of
those costs. The rest, who pays for the rest?
You and me, everyone else.
Now, the utility did recently increase certain deposits and
charges for large loads, and that is good.
Requiring these large customers to put more skin in the game when they request to
interconnect is definitely better than how things were before.
But according to our preliminary calculations, even had that
updated policy been in place these last five years, the
rest of ComEd's customers would still have been left covering a
huge chunk of big tech's interconnection costs.
We're still working on the math of that, and it's really hard to get more precise
on how much would be socialized under current regulations,
because largely, we don't know which of those giant customers will
actually show up.
If the data centers all max out their load ramp and pay maximal
transmission security agreement charges, less of their
interconnection charges costs are
socialized. On the other hand, if the large loads don't show
up or use less than they say they will, the rest of us end up
paying more.
So it's not just the vast appetites of these hyperscalers
that's throwing our system out of whack.
It's the speculative nature of data center development, too.
We're also seeing the effects of all this on the supply side of the bill, as I
said.
Soaring demand projected for new and proposed
data centers has tightened the supply-demand balance in the wholesale
markets and increased the cost of reserve
electricity or capacity at the auctions that are run by
PJM.
PJM's independent market monitor found that data centers
were behind the capacity price spike that ballooned ComEd customers'
bills starting in June of 2025, which actually
coincided with a giant heat wave, so we saw some insane bills last summer,
as we're seeing this summer.
The independent market monitor at PJM said, quote, "The current
conditions are not the result of organic load growth.
The current conditions in the capacity market are almost entirely the result
of large load additions from data centers, both actual,
historical, and forecast."
Forecast. All of these expenses are locked in ahead of time based
on forecasted future energy demand.
Data center development is notoriously speculative, however, and these
forecasts certainly include projects that will never
actually get built. Unless data center developers make the
necessary financial commitments up front, the rest of us are
left holding the bag.
So you're probably getting the sense that as a ratepayer advocate, I'm
mostly focused on cost implications of data centers
and protecting everyday consumers from shouldering those costs.
But there are indeed system-wide and local environmental impacts,
too. Over the years, the state of Illinois has enacted
some really ambitious clean energy goals that I think we can all be
proud of. But unfortunately, the load growth we're seeing from data
centers is threatening our clean energy progress at the state and regional
levels.
There's more to come on that as state regulators put together Illinois'
first integrated resource plan under the Clean and Reliable
Grid Affordability Act, which is due to be filed this November.
This IRP will, among other things, address whether
adjustments to the state's clean energy targets will be needed
to ensure ongoing resource adequacy.
Our clean energy targets were set before data centers were really a
thing, and now data centers have come on the scene and have thrown all of
those goals into question.
So what to do? This is a ComEd-wide problem,
this is a
state-wide problem, this is a PJM-wide problem, and ultimately it is
also a national problem, and work has been happening at all
levels. For example, FERC recently issued a show cause order to
the six regional grid operators, including PJM, giving
them two months to either justify why their current
rules are just and reasonable with respect to data center load,
or if not, to file tariff changes to make them just and
reasonable. For its part, PJM is also
working on the issue. I won't get into that, spend way too much of my time
dealing with PJM, but I'll just say that given their governance
structure, we are very concerned that the policies adopted by
PJM will not go nearly far enough to protect
residential electricity customers.
And whatever happens at the federal and regional level, we are going to need state
action to ensure everyday customers don't end up on the hook for even
higher costs due to data centers. And that's why CUB is one of many
organizations, many of whom are represented here in the audience, that support the
POWER Act, HB5513, which would
require utilities to create new rules to protect their existing
customers from subsidizing data center related upgrades to
transmission and distribution infrastructure.
It would also require data centers to bring their own new clean power if they
want firm electric service that won't be curtailed at times of
high demand. And we're working to get language added that makes clear that any
costs coming down to us from PJM, that PJM
identifies as being data center related, actually get allocated
here at the utility level to the customers that brought about those costs.
So here we are in the city of Chicago, and I'm here to reassure you that meanwhile,
there is plenty that we can do at the municipal level.
I applaud the working group's recommendations that the city
create a permitting program specific to data centers and
update the city's zoning ordinance to address data center impacts.
Curbing the air and noise pollution impacts of these facilities will be key
to protecting Chicagoans' quality of life.
When I go to some of these really spicy meetings out in the
suburbs, people are most angry about noise.
And the City of Chicago is in a position to establish strong
environmental safeguards, and I urge you to do so.
I'm also pleased to see that the working group called out the need for
transparent energy and water use reporting.
As Jared said in his presentation, it's hard to regulate something without the
details. And I think it's wise to keep in mind the
potential for waste heat reuse and the city's leverage when
it comes to hammering out community benefits agreements or similar mechanisms to
bring value to residents when a development is
proposed. I'd also like to flag the opportunity that
revisiting the city's franchise agreement negotiations with ComEd
might offer us. If you remember that in early,
I think January of 2023, an agreement was reached
in which the utility would have been granted a 15-year contract
extension in return for, I think it was $100 million for the
city to use to combat climate change.
That agreement never went anywhere for a lot of reasons, but I'd
like to remind everyone that the franchise is still there as a potential point of
leverage.
Because with or without the data center
related challenges, many of my recommendations for the city
actually remain the same.
Mostly, it's find ways to support your residents who are
struggling to afford their bills.
All of the regulated utilities in Illinois submit reports to the ICC
each month, listing credit and collections activities for their
customers by zip code. To all the aldermen here,
check out your zip codes on those reports.
It is fascinating and heartbreaking.
Those numbers are clear that when it comes to utility
affordability, ComEd customers in Chicago are much more stressed
than customers across the entirety of ComEd's footprint.
In May, this is the most recent data we have right now. It's from May.
Nearly 20% of ComEd customers in Chicago were behind on their
bills. In the three worst off zip codes,
nearly 32%, almost a third of
residential customers were behind on their bills and assessed late payment fees.
So I love it when the city intervenes in ICC
proceedings. These are the dockets where millions of dollars of
ratepayer money is on the line. As I mentioned, the city can also use
franchise and procurement negotiations to secure affordability commitments.
It can coordinate with ward offices and city departments to better connect
residents to programs, and it can make it easier for households to get
solar and battery storage installed, especially given that the state does
have programs in place to install solar and soon battery storage in
low and moderate income households.
And what a great way that is to help people keep their homes safe and comfy while
saving energy and money. So I look forward to continuing the
conversation on all the ways we can work together on this, and thanks again for
letting me talk.
Thank you. Thank you for your presentation
and your willingness to show up, as always.
Next up we have Andrew Wren with Prairie Rivers Network, who's joining us
virtually. Andrew, you can unmute now.
Can you hear me okay?
All right. Try again.
Can you hear me okay?
Yeah.
That's a yes? Okay, great.
I'm going to quickly share some slides and-- Oh,
I have to request.
My name's Andrew Raine. I'm the climate policy director at Prairie Rivers
Network. We're located downstate in Champaign.
But we work statewide on water resources issues, and I've been working on
data center issues for a year and a half now, actually, with Sarah
and Covey in the room there.
And we've been thinking about water issues, of course, for decades.
Our organization has been around for
59 years, 60 next year. So,
a lot of experience on water resources issues.
Let me see if I have sharing yet. I do. Great.
And
I do want to say I just came off vacation, so these slides are a little bit
shorter than I-- Not shorter. A little bit less comprehensive than I would
like them to be. And I do want to give a shout-out to the Alliance for Water
Efficiency, who have a really excellent slide deck.
If you want to learn more about anything that I say here today,
I've shared a link in the end of the notes for looking in their
resources because--
And actually, Joanna with the Alliance for Water Efficiency was the person that I
recommended before myself for speaking here, but she wasn't
available. So, you got me instead, and I'll do my best.
And
the other thing I want to say is, I think you've got a very comprehensive-- Your
team at the department has very comprehensive understanding of this, and I think
their presentation was really good.
So I will go quickly over things that I think maybe they've already covered.
I also thought the comments by Illinois Environmental Council and NRDC in the
public comment section were very good, addressing the challenges related to water
resources and data centers. So with that, I'm going to just dive in, and
I'll go through pretty quickly. Are the slides visible?
Somebody thumbs up?
Great.
Okay. So,
just a few things.
Data centers, where are they getting their water, and where does it go?
So, the vast majority of data centers, and I would expect in Chicago,
probably all of the data centers-- Well, no, that's not true.
A lot will get the water from community water supplies.
They're going to get the clean drinking water and use that in their system.
But some data centers may also be getting from surface water
or groundwater. So that would be maybe a data center that's on the river that's
pulling in surface water for once-through cooling.
And then you also have the opportunity for
wastewater reuse, which was mentioned as an
opportunity by the Department of Environment, because that's a
way to mitigate without using new water that your treatment plant has had to
treat. If the data center can use wastewater, that sort of
alleviates some of the burden that the overall system is bearing.
I will say that some rivers do depend on wastewater, especially down where I
live, that's more of an issue. But up in Chicago, there is a lot more
flow,
and wastewater reuse is definitely a good solution there.
And then where does it go? It's kind of one of two places.
They could be discharging directly to waters, so either probably
a river or a lake, or data centers will often discharge
to a wastewater treatment plant that will then take their water and treat
it.
So just so folks have an understanding of the different kind of possibilities here,
and I think for the most part, we're seeing to and from community
water supplies and to wastewater treatment plants.
And as you've heard already today, data centers can use a lot of
water.
The primary way that data centers use water is for cooling.
And this will depend a lot on the technology that the data center chooses to
use.
There are ways to use actually very little water for cooling, that would be like
air conditioning your data center, or there's ways to use a lot of water.
But a larger data center with cooling technology that evaporates water
can be using a really substantial 5 million gallons per
day
amount of water, again, depending on all that technology.
And our statistics on this aren't as good as the energy use statistics because
there is less reporting. There is less transparency.
And so I want to underscore that need for transparency and reporting on data
center water use, because I think that will help us truly understand
what the actual usages are and how we should be responding to them.
The other key consideration here is what happens off-site.
Because data centers, as you've heard, use so much energy, there's a lot of
off-site water usage from that energy generation,
and that is actually a big portion of their impact as well.
So there's kind of two angles you need to think about water use in data centers
from. So digging in on that cooling side of things, you
have this kind of spectrum, and this is a fairly simple way to look at it.
Typically, you're either using more water or you're going to be using more energy.
And I think this is an easier way to look at it,
but the real details are much more complicated depending on technologies.
And this is in the Alliance for Water Efficiency's
report, and it really breaks down the different technologies for
water efficiency and energy efficiency and cooling capacity.
As data centers become more heat dense or more resour-- As they're putting more and
more of these energy-intensive chips into one place, they
need more and more cooling because they're using more and more energy.
A chip basically turns all of the energy they consume
into heat. That is what a computer chip does.
Computing power and heat are the main outputs.
And so as you look at different cooling technologies,
we start at facility scale coolings, like simply air conditioning the place, and
you get down to things like direct to chip, and this is what we're seeing more and
more of. That means that-- Or immersive cooling, where the
chip is immersed in a fluid that is then being cooled.
These component layer technologies
are what you're seeing at the more advanced data centers
that have higher cooling needs. Also probably more expensive, but that's for
the data center to figure out.
And as I was just saying, yeah, so you have the rack density.
This is saying how much computing power Are you putting on a single
rack? And you saw the racks and the images that were shared from the Department of
Environment.
And as you increase that density, you leave behind
your air cooling, and you get to these more intensive
or more direct to chip type technologies.
And just what you want to think about when you're looking at cooling
is that these are all loops. So when we talk about a
cooling loop, yeah, maybe we're doing direct to chip, but that heat still
has to leave the facility. And so you have to understand the full process of
how do you get the heat away from your computer chips and out of your
facility. And ultimately, that means that your heat is going to interact
with air or water in some way. There is no
truly closed loop, because that would mean that the heat is
staying within your facility. So you have closed loops maybe within your facility,
but eventually it reaches an exchange point where that heat has to leave.
So, if you're considering regulations, you want to be thinking
about what are the terminologies we want to use to ensure that, you can't just say
closed loop, you have to be a bit more robust than that because
the closed loop itself is not a singular technology.
And the other side of this is then
offsite water usage. And so I just want to make a point about energy
consumption. The data center that was recently approved in Joliet is
1,800 megawatts, and Chicago uses 3,500
megawatts altogether as a city. So one data center is an
energy demand
almost half of Chicago. And there's another one like Joliet that's about the
same size about to be approved. And so now we've got two that are going to be the
same usage as Chicago. And Sarah with CUB kind of
talked about what are the implications on our grid, to our bills when we
think about these large data centers coming in.
Well, the impact on our water resource is important to consider, too.
That unprecedented energy demand, if it's met with
things like natural gas or coal or nuclear,
become very water consumptive. And this table on the right just kind of shows
when you're looking at those technologies, we're talking about liters of water
being consumed, versus renewable technologies, almost no water
is consumed in the process of using renewable technologies
to meet that energy demand. And so this synergy becomes really important when
you're asking, as the city considering, what can we do to make our data centers
have less of an impact on water? One of the answers is actually using renewable
energy to mitigate that offsite impact, in addition to
what might be happening onsite for water usage.
So that just brings me to a list of things to consider when
addressing water and data centers.
The first is, as I think you've heard a couple of times now, let's get
transparent usage planning, reporting, and enforcement.
Let's know what our data centers are using.
Let's make sure they're accurately reporting that information so that we have a
base level understanding of where to go next.
You might also consider water use efficiency requirements.
So that can be technological minimums, things like you can't
use once-through cooling, you have to use a closed loop system of some kind as a
minimum. And then you get into that above that floor,
innovations in technology, things like direct to chip that fall within that broader
closed loop umbrella. Or you might look at energy metrics, things like
water use efficiency or data center resource efficiency, which is a new metric
that is being driven by industry,
that looks at the whole data center bringing in power and water
together as a metric. Aurora, for example, has set a water
use efficiency for data centers that are going to be built in
Aurora. They've set a fixed number that you have to meet.
You also might consider evaluations on resource impacts.
This is one of the things that we're proposing in the POWER Act.
There's actually a study that's going to be done for each data center by the
Illinois State Water Survey, if we get the bill.
And that study will look at, okay, what is this data center's withdrawals actually
going to do to
the resource it's pulling from? What is it going to do to the river?
What is it going to do to the lake? And it looks through the
community water supply. So you have to know where a community water supply is
getting water to really trace that impact through.
You might want to consider, again, reducing offsite water impacts
by requiring renewable energy to be providing the power for a data
center.
You want to be thinking about scarcity.
So a data center gets built, it might be sustainable in the moment,
but you want to be thinking about, what about our peak demands when there's peak
heating needs? What does the water consumption look like at that data center, and
how does it compete against other water consumptions happening that may
also be at their peaks? And then also long-term scarcity planning.
So droughts, what happens when a data center that's dependent on
water for cooling hits a drought? And how are those resources allocated between the
data center, between people who want to drink the water, between other businesses?
On the infrastructure side, you want to be thinking about protecting ratepayers and
consumers from infrastructure costs.
So this can also come in the form of ensuring that any
costs that are, let's say, your water treatment plant has to install a new
system to meet the demand of a data center, and then that data center goes belly
up. How are you ensuring that your
drinking water infrastructure is not going to be paid for, that new infrastructure
that has no usage is not paid for by your ratepayers, is instead
somehow paid for by that data center?
So you can do things like upfront bonding or other sort of financial mechanisms to
protect yourselves. And then pollution.
So, runoff from data centers, the footprint.
You also have concentration effects as they evaporate water.
That means that whatever's in that water gets concentrated.
And for example, in Oregon, we saw nitrate pollution becoming an issue because the
water that had nitrates in it when it came into the data center got concentrated,
and then it was discharged with essentially water that had extremely high
concentrations of nitrate. They didn't add that nitrate, but they made it a
concentrated problem, and that became a problem for the treatment plant.
And then thinking about are you discharging to water or wastewater treatment
system? And then again, also flagged by your Department of the Environment, you
have opportunities, things like waste heat reuse.
So when a data center, what they're producing is actually heat,
and it's all waste heat right now. If they're just trying to cool their data
center, they're just trying to get that into the environment, so into the air or
into water around it so that it goes away.
Waste heat reuse says, well, what if we plug that into systems that actually want
to use it? Thermal energy network
that maybe is heating a block or being used by an industry.
These are very synergistic that can actually reduce your impact because you're
not wasting the heat, you're using it for something that's beneficial.
And that wastewater reuse is another opportunity here for
mitigating the impact of a data center through using something like
wastewater from a treatment plant.
Just briefly, at the state level, the POWER Act is
proposing a water impact permit at the Illinois EPA
level. And this is a yes or no on a data center
based on an actual resource impact study.
So the Illinois State Water Survey will look at,
here's the data center, they're going to pull this much water from this river.
What is it going to do to that river? Are its other uses going to be maintained?
And that becomes a yes or no at the Illinois EPA.
We're also requiring a floor of closed loop cooling, so that
they have to look at different cooling technologies within the closed loop world
and pick one that is at least as efficient as, so they can't do
one through evaporative cooling if it's going to be wildly inefficient.
And then ensuring that infrastructure costs are paid for by the data center
and don't fall on rate payers one way or the other.
And this is achieved through basic planning, a plan from the data center, and
then also ongoing usage reporting, and all of that being made public
on a publicly available website. And
that's really all I have to share with you.
I commend the city for taking on this process and for considering these questions,
and the work that's been done by the Department of Environment is impressive.
These links, I can send them if they're not available from the slides, so that they
can be available, and I look forward to your questions.
Great. Thank you, Andrew. I appreciate it. And we hope you had a nice vacation.
Next up, we'll hear from Kavi Chintham with Vote Solar.
Hello. Okay, cool.
Good afternoon, Chair Hadden and members of the committee, and thank you for the
opportunity to testify today. My name is Kavi Chintham.
I'm the campaign manager for Illinois at Vote Solar.
We're a national advocacy organization working to make solar
more accessible and affordable across the country and propel us toward
a 100% clean energy future. Vote Solar is
also an active member of the Illinois Clean Jobs Coalition.
I also hold a PhD in chemical engineering from Northwestern
University, and I'm a resident of the 48th Ward here in Chicago,
where I organize on the north side around environmental justice issues.
The recent rapid growth of data centers here in Illinois and across the
country raises fundamental questions about how we protect our
communities, environment, power grid, and water resources.
It is the growth of artificial intelligence that has created unprecedented
demand for new data centers. These facilities, as everyone
has been alluding to, are not simply another commercial development.
A modern hyperscale data center is one of the largest industrial
facilities a community can host and has real and lasting
impacts on the communities where they're built and beyond.
A single campus can require hundreds of megawatts of electricity,
enough to power hundreds of thousands of homes.
It may require significant amounts of water for cooling, dozens of
backup diesel generators, and new substations and transmission
infrastructure.
Because of their scale, these projects affect land use decisions, water
resources, air quality, noise, transportation,
emergency planning, utility infrastructure, housing,
economic development, and the quality of life of nearby residents.
Chicago has a unique responsibility to address the
outsized impacts data centers have on our communities because of its
history.
For decades, Black, Latinx, and low-income communities in the
south and west sides in particular,
have borne a disproportionate share of the city's industrial
pollution and infrastructure burdens.
That history has taught us an important lesson.
We cannot evaluate new projects in isolation.
We have to ask what they mean in the context of the pollution
infrastructure and environmental burdens communities are already living
in. That principle that cumulative impacts matter is
one that environmental justice advocates in Chicago have fought for over
many years and is increasingly being reflected in both state and local
policy discussions.
Over the past few months, as Sarah shared, members of the Illinois Clean Jobs
Coalition, including myself, have engaged in town halls and community
meetings across the state to listen to residents' concerns about data center
development.
Together, we've heard from communities in Waukegan, Rockford,
Springfield, Aurora, and beyond.
And repeatedly, we hear the same questions.
Who pays for new infrastructure? Will utility
bills increase? How much water will these facilities use?
Will polluting diesel generators affect local air qualities?
And will communities have a meaningful voice before decisions are made?
These concerns are not hypothetical, and local governments across the
state have already begun recognizing that existing policies are not
enough.
In Aurora, data centers were allowed under zoning rules that treated them
like warehouses. Nearby residents began reporting constant
humming, vibrations, and concerns about the scale of polluting backup
diesel generators supporting these campuses, which they stated
sounded like jet engines.
Those experiences ultimately led the city to adopt a temporary
moratorium in order to craft, and eventually passed, one of the most
comprehensive data center ordinances in the country.
In Sangamon County, residents raised concerns about a proposed
280-acre hyperscale data center campus expected to
require up to 600 megawatts of electricity.
Despite extensive public testimony, the project ultimately
moved forward.
That experience underscores why communities need clear standards and
guardrails in place before projects are proposed,
rather than trying to address these issues during a single zoning hearing.
In Champaign and Morgan Counties, local officials chose to
temporarily pause new data centers while they develop
zoning standards that better reflect the scale of these facilities.
And in Grays Lake, residents expressed frustrations not only with the
scale of a proposed hyperscale data center, but also with how
little information was publicly available during the approval process,
prompting broader conversations in Lake County about model regulations and
a temporary moratorium. And there are many more examples like this.
These examples are all unique, but they point to the same lesson.
Communities should not have to figure out how to regulate data centers one
project at a time.
Chicago has an opportunity to act on this lesson.
This hearing and report should serve as the launch of this
conversation so that Chicago proactively establishes
guardrails before the next data center proposal is on your agenda.
And at the state level, as folks have already said, the Illinois
Clean Jobs Coalition has been working with legislators on the POWER Act,
legislation designed to establish statewide guardrails for large data
centers. And the bill also recognizes that some challenges
cannot be solved by municipalities alone.
Statewide protections are critical, but they're only part of the solution
since many of the impacts people experience are inherently local.
Furthermore, local policies will push for more comprehensive policies by
state legislators, creating lasting protections that communities
can choose to build on as appropriate for their own needs.
Chicago has an opportunity to establish clear expectations
before data center development accelerates with no guardrails.
We also have an opportunity and responsibility to ensure that data
centers support and not undermine our clean energy future.
If massive new electricity demand arrives without new clean energy
storage and flexible operations, it can increase consumer
bills, strain the grid, and make it harder for us to meet our climate
goals. If a company is building one of the largest new electricity
loads in the state, it should also help build a clean new energy
needed to serve that load, rather than taking the new clean energy
that folks like us are using.
That approach not only protects existing customers, it also
reduces pressure on the grid and ensures that the clean energy transition is
bolstered. With the right guardrails, data centers can
support new renewable energy, deploy battery storage, and improve
grid reliability.
Ultimately, this conversation is about how Chicago meets the moment.
We have an opportunity to learn from what's happening across Illinois and put the
right guardrails in place now, so that if data centers are built
increasingly in Chicago, they're developed in a way that protects our communities
and reflects the values the city has worked so hard to advance. Thank you.
Thank you so much.
And lastly,
I turned my own mic off. We'll hear from Craig Huffman from
MetroEdge.
Thank you.
Good afternoon, Chairman, members of the committee, Commissioner
Tovar, and the working group.
Thank you for this report and the chance to testify today.
I read the report closely, and I believe this committee is pursuing a
thoughtful, serious approach to future data center development
in Chicago. And I want to be part of getting it right.
My name is Craig Huffman. I am the co-founder and CEO of MetroEdge
Development Partners. We're a commercial real estate development firm,
and we're not headquartered in Loudoun County or Northern Virginia.
We're based here in Chicago by Chicagoans.
Our inaugural development, IMD1, is located in the Illinois
Medical District. Our land is located on the Illinois Medical
District on the West Side of Chicago, and we are joint venturing with one
of the top data center developers, H5 Data Centers, to
build a world-class facility.
H5 is partnering with us because our site is now very
valuable at a time when data center sites are hard to secure,
and frankly, we know Chicago better than they do.
A little bit about my background. I was born and raised on the South Side by two
public school educators who fled the Jim Crow South in the
1960s. I attended public elementary school, went on to
Morehouse College, then returned to Chicago for two master's
degrees from the University of Chicago, one in nonprofit
management and an MBA in finance. I left the stability
of working for someone else in 2004 to become a
full-time real estate entrepreneur, and I became the first in my family to do
so.
MetroEdge has been the hardest venture that I've ever pursued
because I came to this industry lacking the privilege that many of
my colleagues and competitors enjoy.
It has taken years of navigating skeptical looks,
rising anti-data center sentiment, and way too many
microaggressions to even count while I learned this high
barrier to entry industry from the ground up,
all while there was no guarantee that our plan to bring a data center to the
West Side would work. As of today, I am the only
African American equity partner in an active data center development
in Chicago.
Over the last six years, I've traveled the US meeting with data center
operators, developers, and investors.
Given the enormous upfront capital
investment this industry now requires, there's almost no
representation of traditional US minority groups in data center
development, and that absence isn't an accident.
It reflects who has historically had access to investment capital,
technology relationships, and the private conversations where
confidential transaction details are often negotiated and
finalized. That's part of why I'm here, not to defend
our data center development, but to show what's possible when the
data center industry looks different than it historically has,
and when the people building it have a real commitment to the
communities where they invest. In 2025,
technology and data center investment drove over 80% of the
total US GDP growth. Illinois has been a top
destination for the last few years.
We cannot pretend this infrastructure isn't relevant to Chicago's
future as a global city. At the end of the day, data centers
are the plumbing for the internet.
Why
does all this matter? The committee's report highlights a pattern of massive,
out-of-town capital showing up with a permit application, a
name nobody's heard of, and a promise nobody can verify.
Communities have asked, "What's with the secret
NDAs? Why is there no public dialogue?
Where's the transparency?" These are not unreasonable questions.
For us, transparency has meant showing up at meetings ourselves,
using our own names, answering hard questions in the room,
rather than through a law firm or a lobbyist.
When the working group lays out its framework, environmental permitting,
responsible zoning, transparent reporting, I don't hear a
burden. I really don't.
I hear how we, as MetroEdge, have approached IMD1
from day one, before anyone required it.
And here are three reasons why we believe our model should
be a model this committee considers for future
investment. First, our development will have near zero
water use. Water was the most frequently
raised concern at the last community conversation event, and the report
notes hyperscale water use can rival a small town's daily
consumption. We agree.
IMD1 is designed with a closed-loop system that will
allow us to meet a water usage efficiency of zero.
We will not be putting a hose in Lake Michigan for our cooling,
as some people have alleged. This is not a future goal or
promise on paper. It's a direct built-in answer to the report's
central concern.
Second, IMD1 is the smaller infill
redevelopment model the report says Chicago should pursue,
not the sprawling hyperscale campuses driving national
concern. We have a four-story, roughly
150,000 square foot facility on less than
four acres on a site that's been vacant for 50
years.
We're bringing investment back to this site, and our data center will serve
healthcare and life sciences institutions within the
district itself. Not an out-of-state AI training load,
a genuinely different use case than the ones driving the report's
grid strain and land use concerns.
And then third, I really want to emphasize this, community benefits.
The report demanded local hiring, job training
pipelines, and tax reinvestment rather than buy-right
development with no community return.
We believe the committee's recommendations are a really good start,
but not enough.
There needs to be more. Data centers should prioritize
recruiting and training talent from local neighborhoods and
pursue more inclusive partnerships with the wide range of
vendors that have profited from the recent data center investment
boom. In our West Side location, we're also pursuing a charitable
vehicle known as a donor-advised fund that would
incentivize some of the very large customers that rely on data
centers, such as Amazon, Microsoft, Google Cloud,
Oracle, Meta, CoreWeave, and many others,
to support college scholarships, home buyer down
payment assistance, and workforce training.
To date, only out-of-town philanthropy has shown interest in this idea,
which tells you something about the need to include more groups in
community benefit discussions. At the end of the day, a data
center should not just be in the community, it should also be of the
community. In closing, I understand the instinct to
slow everything down until every question is answered.
The concerns in this report, noise, emissions, grid
strain, water use, Chicago dollars leaving Chicago,
are all legitimate and deserve rigor.
But data centers are no longer optional
infrastructure. They run hospital records, payroll
systems, and the internet that many of us,
and those of you that are elected officials, your very constituents, will use when
they go home tonight.
The question was never whether Chicago hosts the
infrastructure. It's how we do it in an environmentally
responsible way. It's who builds it and for
whose benefit.
We can curse every project at the door or do the harder
thing, light a candle, set the standard, and build a
model that lets local communities be genuine partners.
That's why I'm asking you to look at our joint venture with H5 and
consider these elements of our model in your approach going forward.
A homegrown developer, local. A vacant site in
need of investment, a vacant site not next to residential I
add. A plan to partner with and listen to the
community. And last, and certainly not least,
transparency on numbers. We have no problem reporting
any of the things that the committee has proposed.
It's good policy. I'm from here. I believe in this city.
I was born and raised here. You need to be local to have the lived
experience of what a city means. And so if a
startup Chicago company like Metro Edge can meet this bar,
there is no excuse for other developers not to do it.
Thank you, and I'm happy to take any questions.
Thank you so much, Craig.
Thank you again to all of our panelists and we're now going to open up
for questions from members. I've got Alder Lawson
up first, and then just let me know. Okay.
Great.
Thank you, Chair. There's a lot of information here, and it's a lot of good
information. I want to thank everybody from the panel for sharing this, and Chair,
for putting it together.
I never take my zoning hat off, so maybe I'll just start with that because
what I'm hearing is, I think we have opportunities to regulate
location, to regulate size, to regulate
certain usages. Obviously, if we put everything into a PD, that's
a lot of time and energy,
but maybe there's a way to look at it
in another way.
Real quick, about half are co-located, I think I heard, of the 39 in the
city. Is it half that are co-located with some other structure or building as
opposed to standalone?
I know half are in a PD, but not because they're required to be, because they're
co-located use or their campus, whatever it is, is in a PD.
Thanks, Alderman. Maybe I'll answer that.
For the record, my name's Bradley Roback with the Department of Planning and
Development.
I think what you're referring to in the report, the 39 that we identified
there, are about 25% that are sort of
standalone.
Okay.
The other 75 are located within an existing building.
They're a room or a bigger room or a couple of floors, something like
that.
Okay.
I think some of the co-location that-
Really quickly-
Sure
... can the DOE team, can we get the slide back up?
Sorry. I know the slide that had the number.
Need someone to log into the computer.
Yeah.
Gina, it's your f*****g
All right.
Sorry, please continue.
Oh, yeah.
Thanks.
Good timing. I was going to refer to that that Jared also reported
on co-location.
Right.
I think there's some overlap with terms that are there.
Okay.
But I just wanted to point out that a lot of the ones that we identified are
actually in existing buildings already.
Well, and I use that term co-location because we use it for utility infrastructure
now. Cell towers, right?
Yeah.
If it's part of a larger facility, if it's a standalone, they're treated
differently, as they should be. There's a dot in Rogers Park,
which I assume is on Loyalist campus.
I'm an alum, right? So right, that's well, maybe standalone or part of a
building that's part of a larger PDA campus, and probably not serving anything
beyond the campus, I would think either.
Not that it would make a difference necessarily, but...
Yes.
Co-location.
I don't know.
Sorry.
I don't know the actual usage. We didn't have that kind of data-
Right
... to look at.
Yeah. But this is the slide we wanted to look at.
10 standalone, 29. Okay. All right, so you said about 25%.
Could I also add something about AI, just quickly?
There's been a lot in the news about AI.
The first iteration of AI was these massive campuses.
They don't want to do them in big cities.
The land's too expensive, it's too difficult.
You want to get 1,000 acres, you're not coming to Chicago.
You're going out to the middle of nowhere.
And a lot of the pushback has occurred.
I have traveled the country and seen data centers.
I'll be honest, when I went to Virginia, I thought to myself, "This is too many
damn data centers out here." They were everywhere, right?
Part of it is that's where the fiber came in to the country.
Right.
And so regulating is important because
otherwise it becomes like little kids in soccer.
Anybody seen little kids play soccer? Everybody runs to the ball, right?
Instead of spreading out. And so the first iteration of AI
was these massive campuses. The next iteration is going to be what's
known as edge data centers. These are smaller
footprint. Think cell phone towers when we all were using
mobile phones and we used to get dropped calls and we said, "Oh, the coverage is
going to be bad." Well, we don't really use cell phone towers the same way.
Data centers are providing that connectivity, and when we think about smart
cities, we think about autonomous vehicles, we think about all the things
that we frankly are going to rely upon to keep a city like
Chicago world-class, it's going to require this combination of
infrastructure that's large. And I agree.
Regulate the big data centers. I know some of those groups, and
they certainly should do more. I think at the same time, within cities,
think NFL cities, to expand upon the
massive need, they're going to need to be present.
So what I think you're going to see coming down the pipe
for Chicago is going to be more of these compact edge facilities,
because you just don't have the land. You don't.
Our site's on four acres.
Let that sink in, right? And quite honestly, 10
acres or less is really your sweet spot for edge.
Okay.
So if that's helpful in terms of, and so you could have a single
customer take an edge facility, but also a single
customer using one of these massive AI facilities-
Right
... in the middle of nowhere.
Right.
10 acres can be hard to come by.
It can. Four is easier.
In a neighborhood like mine, right?
Absolutely.
Two.
And that's another point. Our site,
50 years ago, had a manufacturing facility that employed a lot of people
I pulled up some historical photos of this manufacturing facility, and I
thought it was a cloudy day. I said, "Oh, look at all the clouds." No, it was all
the smoke billowing out of the building-
Right
... at a time when we measured environmental standards.
I think just as we looked at that era as being dirty and we correct it,
this is an opportunity to correct data centers going forward.
But I'll tell you, it shouldn't be as difficult because while I was sitting here, I
pulled up, even when you talk about diesel, the fuel that goes in
diesel. There are environmental solutions.
The answers-
Right
... are within finding solutions, not just blocking the
progress. Sorry.
That's actually-
Oh, uh, yeah, I was going to say I think,
Commissioner Tovar wants to talk.
Yeah. I just want to offer one point.
And I appreciate the feedback,
Craig, and I think you've raised some really good points.
I don't want to minimize the impacts of what we would perceive
as smaller data centers. I think that the report lays out
that there are still significant impacts in an urban context that are important
here. That is validated by just our
experience with co-located facilities.
We're seeing an increase in 911
complaints or 311 complaints rather because of
issues related to sound, related to noise, concern about diesel generators,
the testing, the air pollution. Those are valid concerns.
And while
Craig is correct, we may not see these hyperscale facilities, it
certainly doesn't minimize the need to think about
important and smart regulations for what we would
call "small to medium facilities."
Right.
A 20 megawatt facility in the city of Chicago could be the same size
as what we would consider a hyperscale Amazon facility, right?
Or a big distribution warehouse. Those are big impacts.
That's a big footprint. That is a sizable amount of
generators that we would see, that would provide
backup diesel power, which
could burn particulate matter, which is-
Actually, yeah
... a carcinogen, and that is concerning for us.
So I do just want to name that both of those are
important,
as we think about this within the context of the city of Chicago.
Sure. I did want to ask about diesel, so maybe I just go over to
there. What's the other option? There are backups of all
kinds. I've had diesel generators outside Wrigley Field, Commissioner, as you know.
And I can't imagine 10 of them all in a row.
I can-- Oh.
Yeah, you guys want to-
I can speak on that.
Mm-hmm.
Yeah. So first of all, for diesel generators, there are different
tiers.
Right.
So tier four, like the most efficient ones, they're still
polluting, to be clear, but they are more efficient than tier one to tier
three.
Right.
The cleanest option to replace those are battery
storage. Those can act in the same way, where you have
batteries. They could be standalone batteries or they could be powered
by clean energy, like solar or wind or whatever.
And they can be the same as diesel, where you flip a switch,
but they'll be battery storage instead.
So
highly recommend requiring
data centers to either use battery storage partially in like
a hybrid setup and certainly,
combined with, if you do still want them to be
allowed to use diesel generators, make them the most efficient ones possible.
Okay. All right.
Could I add a little bit of perspective?
Sure.
We're in a medical district with our site,
four of the largest hospitals. Every hospital uses
substantial number of generators because they're mission critical facilities.
Every hospital in Chicago requires generators.
I'm not comparing, but I'm saying just like every golf course uses
substantially more water than many data centers.
We have to begin to understand that, yes, we should do it
better, but we also have to be consistent.
When it comes to batteries, I agree.
In our design, we have batteries as a backup.
But when we talk to customers, right, some of the large names that are driving
our economy, they dictate. They're the tenant.
They say, "No, we really want generators instead of battery.
No, we don't want solar." I love solar. I'm putting it on my home.
I tried to explore it. Some of this is a
negotiation that has to happen both at
the community level, but also these companies that are using have to
understand that if they're going to come into a city, the requirements to operate
are going to be X, Y, right? It's not
just the developer making a decision in a bubble.
It's also the groups that are going to use the data center.
Because case in point, when we build this, I won't even have access to parts of the
building that the customer is in for security purposes.
Right. I think sort of
speaks to my next question as to what we can regulate and what the state has to
regulate, right? Obviously, location, things like that.
But the type of generator being used, is that something we
don't need the state on?
Energy limits and water limits are a state issue, though.
If we were to say,
per
center or per
capacity, you're limited to a certain number of gallons or
megawatts.
Can I be a traitor to my industry for a minute?
You might have been already.
Yeah, right. I think I have got some death threats.
But what I want to say is, I think a lot of the pushback on data centers
in the long run is good. I really do.
And I'll tell you why, because it forces innovation.
I'm having conversations with some of the hyperscalers.
They're not ignoring what's happening around the country.
At the end of the day, these are extremely profitable
investments, right? I hope no one missed the fact that
I am sitting on a financial model where we are proposing to pay for
college scholarships, down payment assistance, and training.
It can be afforded in our business model and some.
Right.
So what I would say to people is the secrecy around this industry is a
problem, but there's also a need for us to have conversations about, hey,
the environmental is non-negotiable, but are there other things that you can do in
the community? I use the example, right?
I'm old enough to remember Little League baseball teams sponsored by local
businesses. And those businesses had a connection.
As we went national franchises, we lost that You rarely see
sports teams sponsored by a local business.
If a data center is going to require local resources, it
needs to think like a local business.
It needs to be a community partner and operate that way.
I think that's sort of where my question is going, as to what ability
do we have to require or regulate that?
I know we can put together a CVA on anything,
but our ability to enforce it and require it is maybe where the teeth are here.
Yeah. I can add a little bit, Alderman.
So, without getting into the nitty-gritty of a very specific
requirement, the short answer is,
absolutely the state, and as Sarah talked about, the federal government certainly
have a lot to say about energy. But that doesn't mean that local
governments can't craft particular requirements
around, for example, a deployment of renewable energy
or water efficiency.
To give a couple examples, the
city of Aurora actually has a minimum
renewable energy
provision in the ordinance that it recently passed.
Okay.
So this is an ordinance that actually is on the books now
as of earlier this spring. So that's just one example locally.
And you see similar examples in other parts of the
country. Like I said earlier, the nice thing here is we have so many
communities working on this issue at the same time.
You're really seeing great ideas bubble up to the surface.
So you're absolutely right that the state has a lot to say, specifically
about utilities and energy. But
that doesn't mean that we, as a city, just as things
exist for the larger questions regarding our electric utility, we
as a city and you as a council
work on various issues relating to regulating ComEd all the time, even
though absolutely the state legislature and the ICC have
a big role to play. So I wouldn't count it out.
Well, I think we're going to have to work with them closely as this rolls out,
right? That's going to be clear
for everyone's use. Just a couple other quick questions, then I'll turn it
back over, Chair.
Well, let me say, this is not the first emerging industry the city's
been behind the eight ball on. You name it. I've been around here a long time.
Whether it was Uber or Lyft, or Rideshare, or HouseShare, or
I got the Coco and the Serve going. You name it, right?
Government is usually the last one to react, and local government sometimes even
more so. So,
we have to get up to speed and figure things out, but
what are we doing right now?
So, what does the approval process look like right now?
Is it just sort of all by right everywhere, unless it's in the PD for some
other reason?
Yeah.
Thanks, Alderman.
Or a B, C, and M, right? You can't do it in a B1 or an R.
Yeah. There's a table in the report-
Correct
... that explains where you can do it by right-
Right
... currently. It would be a planned development if it exceeds the thresholds that
are in the zone.
Sure.
Who's storing our data,
the city's data right now? Who do we use? Where is it at? Do we know?
That's a report. Alderman Vegas is-
If they tell you...
Will they have to kill me if they do?
We'll have a closed briefing on that one, maybe through the chair.
I think we can briefly answer, but we could certainly, through the chair, get back
through DTI.
Yeah.
I believe some of it is in city facilities, and then if we have cloud
providers like Microsoft, some of it is likely in
Microsoft contracted facilities. I think that's the short answer.
It's a mix.
Okay. Great. That's all I have. I look forward to working together on all this.
Again, I'll keep my zoning hat on and be helpful there. Thank you.
Thank you, Chair.
Can I just add-
Thanks, Alderman.
Can I just add one thing?
Oh, yeah. Mm-hmm.
Okay, there we go.
I just wanted to share a list of the regulations that are in
the Aurora Responsible Data Center Ordinance to get a sense of
the kinds of things that they were able to do.
And then if we could get a copy of that afterwards,
too, so we can share.
Yeah, absolutely. For sure. But just briefly, they
regulate operational impacts, including energy use, water use,
noise, landscaping and screening, emergency backup power,
stormwater management, environmental performance standards, and
operational reporting requirements.
They also establish zoning and siting standards,
require city council approval, and conditional use review for new facilities.
And then lastly, they created a data center privacy
protection ordinance that governs privacy-related practices.
But I can share the full thing-
Great
... for sure.
Thank you. All right. Alder Ramirez, and then Alder Cruz.
The press. Okay, great. Well, I want to thank the committee.
It's a really great panel from the working group, to hearing Craig's
perspective. I don't know if we can get the map of where
the data centers currently exist back up.
I'm really interested about this land use, this idea about four
acres versus maybe a much larger space.
And then also something that you said, Jared, just about the demand
needed in terms of close proximity.
Can you talk a little bit about where we started as a
city, that growth to where we are now, and what you
expect, I guess, in the future in terms of that demand?
I guess what I really want to know is that does it make
sense if the demand is there and we need to build out to
have smaller ones in various places?
What I'm worried about is manufacturing districts where I'm from on the
southwest side, that we have that land capacity, and
that we potentially have just a very large one in a very
concrete area, concentrated area.
Yeah, absolutely. So several people have mentioned, I believe myself
included, that Chicago was an early center for data center development.
We started to develop data centers here, I believe as recently as
20 years ago, where some of the currently operating data centers were
founded. That was long before artificial intelligence.
Those data centers primarily served a telecommunications function, so
the internet, but also phone calls, text message, all cloud
services. Those go through data centers totally separate from
artificial intelligence. The large boom that we're seeing today is due
primarily to the growth in artificial intelligence.
The really large giga scale, hyper scale facilities that you see
on the news are for training artificial intelligence models.
But there are also separate, smaller artificial intelligence data centers.
Those are known as inference data centers.
You can kind of think of it as a training center
is an oil refinery, and an inference center
is more of a gas station. So when you are actually running
ChatGPT or another program, that's not going to the large gigawatt
scale facility in rural areas. That's probably going to a smaller edge
data center to help speed up the processing time.
So we likely will see more of those smaller data centers popping up.
I will also say that the growth in artificial intelligence has also
increased demand for other types of data centers.
So as more people are using these digital services, there's more demand for cloud
storage, which creates demand for more of those smaller distributed data
centers as
well. I will caveat all of this by saying I am not an expert in
industry forecasts, and, as Sarah mentioned previously, this
industry is notoriously speculative, so it's really hard to say with certain
this is what the industry will look like in the future.
But I will broadly agree with your assertion that we will likely see more of these
smaller data centers in urban areas while these larger facilities will
likely be concentrated in more rural areas.
Thank you. My next set of questions is
around something that Sarah was talking about, about the grid.
And so,
in my opinion, ComEd
did a recent communication that was
asking residents, mostly from the West Side,
also predominantly Latino, African American areas,
about their usage on the grid. And so there was large conversation online
about
why that was a chosen selected group
to use less power when we had data centers that were presumably
using more. And so I guess my question is,
I guess outside of land use, how else are
we thinking about the power grid, how it should be obviously serving
our residents that are most vulnerable,
clearly now during the heat wave especially.
And,
is there something that we could request from ComEd as well?
Because you mentioned sort of this $3 billion investment that they had
made, and so is there a demand there for us to have a conversation?
Yeah. Well, so first of all, if you have
an example of a call for
conservation from ComEd to a specific community,
I'd like to see that, because I did not see that. I'm not aware of that.
I know that during the
heat waves of late,
a lot of us, especially those of us on special like time of use
rates or hourly rates that are time variant, not just levelized over the
course of the day, but
signed up proactively for a time variant rate, did receive
alerts that the real-time prices were high.
And so I get those. But I'm unaware of
anything that went out to a specific neighborhood, so I want to see that
because that might be problematic.
Commissioner, do you want to-
It was for the West Side substation area, I
think.
Oh my goodness.
I think, Commissioner.
I don't know, Commissioner. Oh, sorry. Jared.
Not to derail on the larger question.
Yeah. So
Alder,
we know what you're referring to.
Our understanding, obviously not representing the company directly, but our
understanding is that the company was
mitigating a possible risk of a
substation
off of I-555 that if it had gone
down, would have affected the west and southwest sides of the
city, as well as a number of west suburban communities.
I think as far as we understand at DOE, this
was a localized issue with that
substation.
I think you make a very valid point about
the role that data centers will play during extreme heat
events where there's a concern about having enough power.
This particular issue was more
due to this local facility. So
a data center
going off the grid would only have helped there if it was within the
footprint of this particular substation, which I don't think we know one way or
the other whether there are particular data centers that would've
helped in that sense.
And I'll add to that. So ComEd did reach out, and it was
a
mechanical risk at a particular substation, so they
said, like, "Hey, customers in that area are going to get a note with
this ask while we work on repairing this to
make sure that it doesn't go out."
Yeah.
But can I throw one thing in, though, where you are very much raising
an important issue. Meanwhile, during the heat
wave, PJM, which runs the overall grid from here all the
way to the East Coast, so the big grid that supplies us, it's
much broader than just ComEd- They also had to begin looking
at extreme measures due to a concern that the
overall grid was going to run out of supply, and they actually went to
FERC, that's this federal agency that regulates the big grids.
They asked for permission, if need be, to order the data centers
to go offline, which means that they would've been using backup
generations solely. Now, my understanding, you can correct me if I'm wrong, Sarah,
did they actually take that measure or they just had the permission to take it?
They had permission to take it.
Yeah. It didn't quite come to that point, but we're certainly headed
into some very difficult questions, when
the grid is potentially hitting a point where there's not enough power.
Managing
peaks in demand for electricity is a lot
of what drives up overall costs year round.
I talked about those wholesale capacity auctions at PJM.
Capacity is basically extra payments that we make to
generators to ensure they're there when it's super hot outside and
we're all running our air conditioning all at once, and there are data centers
running, too. And so that's really expensive, and that is also
dirty.
We have peaker plants. In fact, your great report talks
about, I think, peaker plants in the city of Chicago
that burn fossil fuels that run only a
very limited number of hours every year.
They only kick on when there's an immense strain, immense peak in the
grid. So I think it's really important, a lot of what I do when I educate
consumers about how our electric grid works is tell them that.
A lot of what we're paying for when we're paying for electricity is not
the energy that we're using, it's the energy that we could be
using during these periods of peak demand.
We have to build up all this generation and grid infrastructure to
meet these demands. And a lot of what I
focus on is trying to help put together policies that
incentivize
households and institutions to curb their usage at these peak times if they're
able to safely. Not to force my
grandma to do that, but ways to leverage any kind of
flexibility. And that's what we would love to see from data centers, as long
as flexibility doesn't mean running diesel generators,
which nowadays is what it looks like.
So
the point, and I'm mad at my friends at
ComEd for not giving me the heads-up about this alert that went out.
I'm going to be calling my friends over there to be like, "Hey."
Because I think we do a lot of work in the field, and we need to know that this is
happening out there. I'm
so glad I'm here because I'm-
Yeah
... bowled over by the fact that this happened. I had no clue.
But it's also really important to make sure
that these
strains on the grid aren't used as an excuse
to gold plate the system. That's the term that we use in utility
regulation is gold plating, because that's how the utilities make money,
is by spending our money. They can earn a return on that.
So that's what we're in the middle of with these multi-year grid plan
at the Illinois Commerce Commission right now.
And like I said earlier, it's always wonderful when the city of Chicago
has the capacity to show up in some of these proceedings because it's really
important. Okay, we know some investment is needed.
We don't want to have to turn off people in your neighborhood,
lest the substation explode or whatever.
But on the other hand, we don't want this to be an excuse for just unchecked
spending.
Do you want to add, Craig, or...?
Yeah, I was going to talk about our deal.
I think I may be the only person here that's a partner in a data center
transaction, so there's a lot of information I have, because the last six years
I've been banging my head against the wall.
ComEd is about to have us pay $4 million to upgrade the two substations that are
going to feed our site. We've spent about $10 million to date,
just permits and approval. This is not a cheap
business, and I guess what I'm saying is you have billionaires that are
financing this business. They should do their part.
ComEd was asking for too little years ago.
They have adjusted that. It was long overdue.
Five data center developers might chase Microsoft needing one
site. They all go to ComEd and say, "We need a
gigawatt," but it's only one gigawatt, it's not
five gigawatts. So there are a lot of things about this industry where we're
building the car as we're driving it.
But the thing I want to add, I think the data center industry has room for
improvement, but there's also room for it in Chicago.
Why do I say that? We need revenue. Unless there's a better
idea, data centers generate the highest property tax
revenue of any commercial real estate asset in the United States.
Hard stop. So when we begin to think about vacant
areas, right? And I can tell you, I've traveled the country.
The billionaires who don't look like me that run this industry, and
99.9% of them would rather not be in Chicago.
They've told me this. They think the politics, whether it's
folks that they think are too liberal or whatever, they don't want to be in the
big cities because they don't know how to navigate.
And so the opportunity is to think about these conversations, not
in a way to say, "We don't want you." But if you're going to be here, here are the
expectations on the environmental side.
But again, I don't want to skip over this.
These are extremely profitable assets that can help people deal with the rising
cost of inflation, the uncertainty of job losses, and try
to pave the way for people to feel a little less certain.
It's not going to solve the city's problems, but in the neighborhood, our view was
the IMD has 29,000 employees,
roughly. We can't impact them all, but that's an area that we
consider our community. Each business should be thinking that way,
right? And I'll be honest with you, as I've talked to some of the people that are
in this business, that's not how they're wired.
The guy with the master's in nonprofit, right, who spent time
community organizing can think that way.
If you've only been on the business side, it's a foreign language, and that's a lot
of our problems here. People aren't thinking about the folks that are in the
neighborhoods and what we need to do to balance that.
But the good news is,
if you go to a hospital and say, "Get rid of your generators," their profit margin
doesn't allow them to do it.
This industry, it's a little different story.
Okay. I'll ask
another question. I'll allow my other colleagues.
The sustainable development part.
I know that you guys have proposed ideas about ordinances that we could
potentially pass.
Are you guys
wanting it to be retroactive? Is there a way for us to work with the
people that already exist in the city and make things better?
I don't know if Jared or Angela, you wanted to...
Retroactive sustainable development policy.
It's an environmental permit.
So yeah, my question is really about how are we working with the data
centers that exist. If we do come to find
that a lot of the data shows that some of the centers are
harmful for the community,
is there going to be room for them to make those changes?
Yeah. So what I can speak to is on the environmental permitting side, because
I think that that's a very important question.
I'll say on the zoning side, and I'll let Brad elaborate, there is no precedence
for retroactive measures on the zoning end, especially if something was
permitted by right.
And so I won't speak to that. But what I can say is that on the environmental
permitting end, the proposal in the report does lay out a
very concrete strategy for us to build an environmental permitting
requirement, both for new and existing data centers.
And I would urge council to really consider that.
Right now,
on the environmental permitting side, the only required permit that a data
center has to pursue, and much like any other
diesel generator user, is an air pollution control permit.
Having an environmental permit creates a regulatory framework.
It could require reporting. It could require
ongoing monitoring. It could require new environmental standards.
And that could happen, and that could be a required
check-in, a renewal permit at a much more frequent cadence than
what we have with our air pollution control.
So it really does move us to think about a standard for data
centers specifically that does not exist today.
And again, that could be something that we would require
that for existing data centers as well.
That proposal would require
council approval.
But it would certainly be something that I would love to work with this
group here on ensuring that we have the right measures in place to pursue.
Thank you so much. Thank you, Chair.
Thank you. All right, Alder Cruz.
Thank you, Chairman Hadden, and also thank you to the panelists.
I think this is a great panelist from experts across the board, not
only the city advocacy group and also for people from the industry.
So I want to say I appreciate that. Typically, sometimes we have one or the
other. So this is a very well-balanced panel.
But I do have some questions and more also
clarification on certain things. And I'll start with Sarah.
Sarah, at one point you said
something between the lines of data centers
should have some financial commitment up front.
And based on the report on page 38,
it mentions the possibility of making industrial users pay
more for water. So my question is, is this
trying to make the larger users pay for more once they
cross a certain threshold of
quantity use? So what will be the impact if
there will be a bigger financial commitment up front?
What would this mean to everyone? Because we talked about
the commit bill and how this reflects to everyone.
I want to see a little more, if you can explain that and what will be the impact,
but also to Craig and the industry,
what is that up front? What would that mean to the industry as
well? I think we're all trying to balance how do we keep up technology, but
also how we are environmental responsibly.
So I just wanted to get your thoughts on that.
Yeah, sure. So to the water side, I'll probably defer to my friends at the city
because
my expertise is around the state-regulated utilities,
not municipal water systems. I don't know anything about ComEd's water rate making
or what kind of deposit policies the City of
Chicago has in place for water. But when it comes
to ComEd and the grid operators
and the kinds of arrangements that the utility has with these
large facilities over interconnecting to the ComEd system,
this is heavily regulated and it's something that we're actively a
part of. Craig mentioned that the
old scheme for assessing deposits, ComEd
would charge deposits to data centers if they wanted to interconnect.
But before, those deposits were
negligible. It was like $1 million per customer, which
to me sounds like a lot of money, but it's chump change to the-- Was it
less for smaller ones? It was chump change for maximum $1
million. Chump change for a lot of these hyperscalers.
And so those deposits
are now higher. The ICC approved a
new tariff where it's kind of a stepped deposit
structure. Now, the point I was making during my remarks is
we believe that for a lot of
interconnections Even those new deposit levels
won't suffice to cover their costs in their
entirety, and this is something that's been uncovered in a
currently active ICC docket. So that's what we're
talking about on the electric side.
It's about
forcing these facilities to pay upfront for the
investments that they require, the grid
upgrades that they require, so that if they don't show up,
or that the rest of us aren't on the hook.
Otherwise, all those costs get socialized across the rest of
customers. And so we want to make sure...
I'm all about minimizing that risk that these guys are
leading to infrastructure investments that at least part of it is being
covered by the rest of us. But on the water side, I'll let my friends over
here say.
Yeah.
Thanks for the question, Alder. We can quickly describe and
elaborate on what that... So first of all, this was one of the recommendations, if
you recall, at the end, where more study
would be needed before proceeding.
But what we heard from a number of different stakeholders was
to look at
and research whether the city should change
the way it currently charges all customers for water, which is uniform.
Basically, whether you are a single-family
homeowner or you are a large industrial facility
or, in the middle, you're a restaurant, let's say,
everyone is charged a uniform rate per, I think it's cubic feet is
the measurement. It's one rate per cubic feet.
There are other jurisdictions where there are
rates by type of customer, commercial, industrial,
residential, and that's actually also, as Sarah was alluding to, that's how it's
done when it comes to things like electricity
or natural gas. So there's a set of rates,
like quantified rates for small
residential customers that live in apartments, for single-family
customers, for large industrial. There's a whole bunch of different categories.
That's what the recommendation
is about. It's about whether the city should take steps to
investigate whether that structure is
better for
2026 and onward, for all of the customers
that receive water here.
Makes sense. Okay.
I'm also going to go to Andrew. I know he was with us in Zoom,
but he had a
chart with cooling technology
trade-offs, and one of them it says one is more
expensive for data centers. So just would be
interested to see that and-
Andrew, are you still with us?
Yeah, I'm still here. Hi.
And let me just pull that slide up so I can share it.
This is from the
Alliance for Water Efficiency's deck on data center primer.
It's really good. But it actually doesn't talk
about costs here. I would say I sort of
asserted that the
direct to chip cooling technologies are more expensive, which is
true, versus just sort of
running broad heating for the whole system.
But you should be able to see this slide now, is that right?
Yeah. So Andrew, based on that, in your research, because you gave
us a lot of good information, whether it is the
three different options.
Based on your experience and what others are doing,
what do you think is working best? I know there's some good
on water efficiency. There's some other betters on energy.
But based on your experience, out of those three areas, what
is working better for other communities or is
better received from community members?
I would say I don't feel fully equipped to answer that question,
and part of it is this
just came out and another report looking
at comparing different
efficiencies at data centers is just coming out.
So we're really on this sort of the high end of what does efficiency
look like and what does cost effectiveness look like.
We're kind of pretty early. The research is all happening right now.
And so
what I think is the best way to approach this is to
set floors of some kind, is to say, "Look, this is the standard you
have to meet." So in Aurora, the floor that they're setting is a water use
efficiency standard. It's a number, and it compares the amount of liters your data
center consumes to the amount of energy that it's using on its IT
infrastructure. That's one sort of benchmark you could
look at. Another would just be a more broad technological benchmark that
just says, "You have to pick among this suite of
technologies and better."
So it sort of kicks out some of these less effective
technologies.
And the other thing I just want to note is direct to chip doesn't
ever exist by itself, because that's going to get the heat off of your chip
and into some system that's still in your
facility. And again, the heat has to get out of your facility.
That's how they're operating these.
So,
you'll have a direct to chip paired with some other closed loop system that's
carrying a fluid from your heat source to your heat
sink, which is either going to be the air or it's going
to be like a cooling tower that is using
water, evaporating water to get heat out
of that loop. And then that loop brings the cool fluid back to your chips, and then
it takes the heat from your chips, and it brings the hot fluid back, and then
that's your closed loop system. So,
I'm not sure if I was able to answer your question, but my gut says
Find good floors to set and don't too much
constrain innovation because there is some innovation happening here.
Or find benchmarks.
Yeah. No, I think as you said, trade-offs, and again,
one of the panelists talked about in another what is going on, I believe you said
in Aurora, we're trying to see what is working. What is working?
What are some other things that perhaps we can mirror, we can look
into? So that was my questions. What is something will work?
But this was great information. I know this is something that just new came out.
But I think, Craig, you had your hand
up.
Yeah. No, I think you addressed it.
I
don't want to be too dominant. I feel like I've been talking a lot.
But I think at the end of the day, we're still in the early innings.
This industry is moving fast. It's breaking things and
moving fast. It's hard to keep track.
The key piece is to have real conversations, not
to assume that the people on the data center side are all
bad.
Like any industry, there are good people and bad people, but the question is, what
are the parameters? How do you set guidelines that are going to protect
communities? That's really what you want to do.
I will tell you, edge computing will have groups
that right now aren't looking at Chicago.
There may be 39 data centers, but I would challenge you to say within the last
10 years, how many of those 39 have been built?
And I would dare say not many. I probably know them.
I could probably name them on one hand.
And so the issue that you want to balance is you don't want to
allow people to come in and do whatever they want, and I feel like data centers
were given that latitude more than they should in certain communities.
But you also don't want to erect these walls that shut
down what could be investment that keeps your city world-class
and relevant. You're going to hear people talking about smart cities.
Mm-hmm.
That means they have the infrastructure to be relevant.
Do you want to be the city forward-facing, or do you want to be the old industrial
city that's dying?
It's really a question, and how do you balance it, right?
And I don't think you just give it all to the billionaires, right, but you
certainly also don't say no to anyone.
I think it's a balancing act. I've named a couple things here.
The property tax revenue. The City of Chicago has some pretty substantial
unfunded pension obligations. Data centers won't fix it, but they should
certainly be contributing tax revenue and other forms of
revenue to support that, right? And this is an industry,
again, I'm probably telling too much, can certainly afford it.
It's okay. That's why we're here, to have those conversations.
And I have more, but I know it's been a long day
for all of us. But maybe when I talked about
safeguards and strong environment, and one of the recommendations was to
protect residents from air and noise
pollution, and the idea was like, how do we do it,
right? We enhance environment permitting process.
Do you have more how to elaborate, like how do we do that?
How do we protect our residents from
noise and air pollution on data centers?
If you have that, if you want to speak at it now, or if you want to send it through
the chair, it's fine.
And as a clarification, Alder Cruz, maybe some
examples of what the standards would be?
Yes. Mm-hmm.
We'd be happy to submit some examples of that through the chair.
Where we wanted to end in the report was not to be overly
prescriptive, but to really give you a set of
recommendations and an invitation to work closely with us to come together
to design the regulations that are required to meet the needs of
modern data centers. So for us, this was an
offering and an invitation to continue working together.
I think everyone on the panel,
we're all clear, and we're in alignment that regulations need to happen.
And so we'd be happy to share an example of what that can look like.
Of course, we regulate many things across the city with
environmental permits, and so there's certainly other precedences that we can point
to where we've regulated
very specific types of equipment or kept things below a threshold.
I do want to just underscore Andrew's point that I think we can
offer a floor just in terms of what the standards could be and still
allow for ways in which we can both ensure that we
are driving new innovation, and that we are continuing to support
responsible growth. I think all of those things are possible
together.
And I think that the floor model is a really good pathway for the
city to explore that. I do also just want to offer, we have the sustainable
development policy here, which has
provided an incredible example of ways in which we have
advanced green building across the city.
There are some emerging pathways that are
new.
Part of the sustainable development policy is that you can require
a third-party
framework, sustainable development guidelines to utilize,
and get a third-party pathway to fulfill that goal.
There are new
ways in which you can do that with data centers as well.
There are new frameworks that are available.
And so I think continued coordination with DPD to think about how to use
that framework as a way to lever green building principles,
new innovation is an exciting prospect as well.
If I can add, our design, as we went through the City of Chicago's process,
technically makes it a lead design facility
or a greener data center. This is where we need to take the conversation.
How do we make these data centers more environmentally friendly?
And the good news is that the major hyperscalers,
I've traveled to some of them, they're all talking about this.
So these aren't conversations that aren't already occurring.
It's how do you plug in and look at best practices around the country?
I'd love to be part of identifying examples that are positive.
I was talking to someone yesterday saying, "Hey, give me examples where data
centers are not as negative." Right?
And I think that's where we want to start, because to say that we don't want any
data centers, and I know this committee's not saying that, I just think it's
shortsighted. It's cursing the darkness instead of figuring out ways to light a
candle.
And I've got Andrew. I see your hand.
Andrew wanted to respond as well, and then Alderman Anna Hoppenworth.
Thanks. Yeah, just to flag a few thoughts.
One is, I think regulations are critical to defend against bad
actors. That's why we do this, right?
And that is an important--
You're not regulating for the person who wants to come in and do the
right thing. I guess you should try to be as frictionless as possible if someone's
going to do the right thing. But it's important to set standards so that we are
ensuring that there is no bad data center developer that lands
a data center anywhere in Illinois, but
for Chicago.
It sounds like the
team in the department environment, I'm sorry if that's not the right title, I'm
familiar with Chicago's
groups, but
has a good understanding of this. But I'll just flag power and water trade-off,
right? And if you say a data center is going to use zero water,
you're proposing they will air condition nonstop, which is going to be
extremely energy intensive, and you're going to see water impacts at
the generation side, and noise impacts locally.
And so you do want to be thoughtful.
And setting things like floors is helpful for allowing
some of that flexibility for the right solution to be found without allowing
anybody to come in below that floor that you've set and
propose a solution that is extremely water consumptive.
Or again, those pure air conditioning setups are not
necessarily what I think anybody wants to see, because that's going to be
pressuring our climate goals as well.
So, just offering a little bit of perspective on that.
Yeah, no, I appreciate everyone. And, just going back to what Commissioner
Torrez said, I think that's really crucial what you said, and I think I praised
that at the beginning. We're such a well-balanced group that you all
have. Again, understanding what are the things we're trying to do, what
is realistic, what is happening in the industry, and how do we come together.
And you're right, it seems that everybody is in agreement to making some
changes to ensure that, again, we are putting safeguards and we're
protecting others. So I appreciate everybody's time.
I know it has been a long day, but, I think this is a good way to start this
conversation. I know things are moving fast, but so we've got to move fast
as well on this topic. So, thank you, Chairman.
Thank you so much. Alderman Anna Hoppenworth.
Thank you, Chair. Thank you for having this hearing, Commissioner
Tovar, and DOE, and DPD.
Thank you, Craig and Kabi, and also Sarah for being
here.
I represent the 48th Ward, Edgewater and Uptown, right
next to the lakefront. And so we are very
concerned about protecting our greatest asset,
which is our lakefront, and at the same time, have a
diversity
of people who live in our ward. And
we're concerned about utilities and affordability, and
generally just trying to stay in the city,
to pay for all these things,
including our water and our electricity.
At the same time, we don't have any data centers
really in Edgewater and Uptown. But I am concerned
about the impact on our environment and
of our people.
I learned a lot today
from everyone, including you, Craig, and Andrew,
talking about the trade-offs. If there's no water being
used, then impact is going to be on electricity.
I would have appreciated a utility company
being here, maybe ComEd. That would've been helpful
just to
frame, what is it that we can actually do here together?
I'm glad to hear
you bringing up
other cities that are in Illinois, not in
Virginia, that we can model
our efforts to protect
our environment and also to look at the opportunities,
like what is it that we're doing with the wastewater.
That's very interesting to me. Thank you for the
sustainable development framework.
I know that things are already in the works, that
there was a lot of preparation that came into this hearing, so I just
wanted to thank you all for that. And
absolutely, we need to be faster
because, as you said, there are 39 data
centers in Chicago, but many of them have not been
built yet. And also, AI consumption is rabid right
now. So I just don't know what that's going to look like
for my own neighborhood and what is going to be
required of us from the city. So we must have guardrails in
place, and so I am
urging all of us to work together to figure that out
and to not be behind Aurora.
Thank you.
Thank you so much, Alderman Anna Hoppenworth.
I want to thank
our panelists today. Again, thank you for
your time. Thank you for your work.
To the DOE team, thank you for the report, right, and from the working group and
working group members. And
I'm going to take a poll. I
will say a lot of my colleagues, our colleagues, are still over in committee in
finance,
where the 78 and parking
meters 2.0 are up for a
vote. And I think that's where the rest of us will probably be
headed after we convene here. But I will say,
for myself, very interested in moving on some of these recommendations.
And I appreciate
the way you've organized them and tiered them as also knowing that
there are things we can do right now
that are going to help us actually maybe think of other things we should do, right?
So I really like that idea of the transparency.
Let's just start getting information.
So, maybe we can intro that on Wednesday.
What do you think, Leslie?
But just saying, you guys in? Lenny,
Ruth?
Jump.
You on board? All right.
We're going to do it. Yeah, we're just going to intro it on the floor.
But for real, to just get going on that, and then we'll gather more
information that's going to help us inform
more of what we want. Alderman Anna Hoppenworth, to your point, I
know with ComEd, when we had our summer preparedness
hearing this year, we were happy to get that update from them that Sarah
mentioned, right, which was the permission that they got
from our state governing body to require higher
bonds for peace. But what else,
right? To your point, what else should we be looking at?
I think Alder Ramirez's question was around that of what are the
investments that we could be doing?
Where could we even be directing people if they're coming, of
knowing we've got a site and a space?
So I think we have continued conversations.
So thank you for that. Look forward to taking some action
with you all and with our committee members here.
So, having no more questions,
this concludes the items before our committee today.
And with no further business, may I have a motion to adjourn?
So moved. Alder Cruz moves.
At 2:44, hearing no objections, so ordered.
The meeting on the Committee on Environmental Protection and Energy is now
adjourned. Thank you.