(ILLINOIS) — Illinois Governor JB Pritzker proposed a two-year moratorium on new state tax credits for data centers in his budget address on Wednesday, February 18, 2026, framing the move as a response to soaring electricity costs and growing pressure on the state’s power grid.
Pritzker cast the credit pause as part of an effort to protect residents from rising energy bills, arguing that data centers have become a central strain on the electrical system and a driver of wider affordability concerns.
The proposal also ties into a broader push to make large power users cover more of the grid-related costs linked to their demand, rather than letting those expenses shift onto households.
Data centers’ electricity use has become a political focus for Pritzker as he talks about bill pressures on residents and the strain on planning for reliable power, with the governor arguing that growth in high-demand facilities carries systemwide costs.
In his budget message, Pritzker presented the question as one of who ultimately pays when large new loads add stress to the grid at a time when electricity costs are rising.
His plan to pause new credits aims to scrutinize whether state incentives still make sense when power demand from data centers, in his telling, creates affordability challenges across Illinois.
Pritzker argued that the burden stems from data centers’ substantial energy consumption without a proportional contribution to grid infrastructure costs, placing the issue in the broader debate over whether residential customers and small businesses should shoulder costs tied to big industrial-scale electricity users.
That framing links the incentive question to household bills, with the governor presenting the moratorium as a way to slow the state’s use of tax policy to encourage projects that, he suggested, deepen grid strains.
Alongside the proposed moratorium, Pritzker directed PJM Interconnection LLC, which he described as the largest grid operator in the US, to require large energy customers, including data centers, to pay for their own capacity resources rather than passing those costs to residential consumers.
The governor presented that directive as a consumer-protection measure, aimed at reducing the chance that grid-planning costs associated with large new electricity demand flow through to households.
Pritzker’s approach ties the data center issue to the mechanics of how grid-related costs get allocated, pushing the argument that large electricity customers should fund the added capacity resources tied to their load.
The PJM piece also places Illinois’ debate over data center incentives into a regional grid-planning context, with Pritzker positioning the state’s policy response as one that pairs tax policy with cost responsibility.
Pritzker linked his data center proposal to the Clean and Reliable Grid Affordability Act, which he signed in January 2026, part of a wider energy agenda built around reliability, affordability and cleaner supply.
That legislation opened the door for construction of new modern nuclear reactors, which Pritzker framed as a way to increase electricity supply while supporting clean energy goals.
By pairing a pause on new data center credits with support for additional supply options, Pritzker positioned his energy agenda as one that tries to balance economic development pressures with the realities of cost and reliability for ratepayers.
Industry groups and political rivals quickly pressed competing arguments about investment, jobs and whether Illinois’ energy direction fits the pace of competition among states for data center projects.
The Data Center Coalition warned that the governor’s moratorium could chill future projects, saying the pause could “further discourage investment at a time when the industry is facing significant regulatory challenges and uncertainty in Illinois.”
Illinois Clean Jobs Coalition took the opposite view, welcoming Pritzker’s proposal and backing his effort to pause the tax credit.
Republican gubernatorial candidates also criticized the move, with Darren Bailey arguing the pause was poorly timed amid interstate competition for data center jobs.
Ted Derowski questioned the realism of Pritzker’s clean energy push, adding another line of attack as the governor tries to connect affordability concerns with an agenda that includes new nuclear support.
The reactions underscored how data centers have become a proxy fight in Illinois over economic competitiveness and who bears the cost of new demand on the grid, even as Pritzker argues the state should not subsidize growth that adds pressure to residents’ bills.
Pritzker’s proposal, as presented in the budget address, seeks to pause new credits rather than argue against the broader presence of data centers, while also pushing changes he says would move capacity-related responsibilities toward the biggest electricity customers.
His push to have PJM Interconnection LLC require large customers to pay for their own capacity resources fits into that message, with the governor signaling that the state’s approach to rapid load growth will be tied to cost allocation rather than incentives alone.
The debate also lands as Illinois considers how to add supply, with Pritzker pointing to the Clean and Reliable Grid Affordability Act and its opening for new modern nuclear reactors as a way to increase electricity generation while pursuing clean energy goals.
Taken together, Pritzker’s agenda links three related fights: whether Illinois should keep offering tax credits aimed at attracting data centers, how grid-related costs tied to new load should be assigned, and what generation sources the state should encourage as demand rises.
The governor’s office did not provide additional specifics in the budget address beyond the moratorium proposal and the related PJM direction, leaving supporters and critics to focus their public arguments on affordability, investment and the state’s long-term power strategy.
For data center operators and state lawmakers, the moratorium proposal places tax policy at the center of a broader electricity-cost debate, with Pritzker arguing that state incentives should not amplify pressure on the grid or on household bills.
For clean-energy advocates, the proposal aligns with a view that the state should tie its economic-development choices to cost discipline and to clean supply additions, including the nuclear pathway Pritzker highlighted in the January 2026 law.
For industry groups and Republican candidates, the move raises concerns about whether Illinois risks deterring projects and jobs at a time of regulatory uncertainty and competition with other states, while also reopening arguments over how feasible Pritzker’s clean-energy direction is.
Pritzker used his budget address to present the moratorium, the PJM directive and the Clean and Reliable Grid Affordability Act as parts of a single affordability push, with the central claim that residents should not see their electricity bills rise because large new loads add system costs without paying a proportional share.
The immediate political fight now centers on whether lawmakers and voters accept that framing, or whether they see the pause as an economic-development retreat in a sector competing aggressively across state lines.
As the debate moves forward, the governor’s approach sets up a test of whether Illinois can curb incentives for large electricity users while advancing a supply strategy that includes opening the door to new modern nuclear reactors, with Pritzker tying both tracks to affordability for residents.
Illinois Governor JB Pritzker Pushes Two-Year Moratorium on Datacenter Tax Breaks Amid PJM Interconnection Review
Governor JB Pritzker’s 2026 budget proposal includes a two-year pause on data center tax credits to mitigate rising utility bills for Illinois residents. By requiring large power users to pay for their own grid capacity, Pritzker seeks to balance economic growth with energy affordability. The plan faces criticism from industry groups fearing lost investment but finds support among advocates for residential consumer protection and clean energy reliability.
