Article Summary
- ComEd data shows that the cost of connecting 30 data centers to the utility’s grid will cost upwards of $3 billion. Some of the spending has already been completed, with the rest of the investments to be made by 2031.
- The data center developers have paid $721 million in deposits for the infrastructure needed to connect to the grid. Utility watchdogs warn that Illinois households and small businesses could end up footing the bill for the gap.
- ComEd disputes the advocates’ conclusion, saying it has been proactive in protecting customers from data center costs, including by securing $1.1 billion in credit that can be collected if the projects do not materialize as planned.
This summary was written by the reporters and editors who worked on this story.
CHICAGO — Data centers have been the focus of growing debate across the U.S., facing a push for regulation that would require operators to pay for the energy and water resources they use, among other proposals.
But beyond paying to generate new energy, consumer advocates warn that the costs of infrastructure to connect data centers to ComEd’s grid will be paid in part by households and small businesses in northern Illinois — something the utility disputes.
Records filed by ComEd in an ongoing regulatory matter show that new infrastructure and system upgrades needed to connect 30 data centers to the grid will cost $3.1 billion. Some of those projects are already connected, with the rest expected to come online by 2031.
Developers of those data centers have paid $721 million in advance deposits, just under 25% of the total cost, an amount that consumer groups including the Citizens Utility Board and Environmental Law & Policy Center say could leave a potential shortfall of $2 billion to be spread across regular customers’ bills.
“Ordinary households should not foot the bill to provide power to data centers,” said Nick Wallace, a senior associate attorney with the environmental law center. “ComEd and the (Illinois Commerce) Commission can protect ratepayers and the grid by requiring data centers to pay for 100% of their power supply and infrastructure investments.”
ComEd contends that the consumer groups’ analysis overlooks $1.1 billion secured by lines of credit that guarantee rate payments from the data centers for 10 years.
Electricity delivery
The $3.1 billion in costs comes from two components of the electricity delivery system: transmission and distribution. Both include using poles and wires to move electricity from one place to another, but at different stages in the process.
Transmission lines carry high-voltage electricity long distances along highways and across state lines from power plants to local substations where it can be reduced into lower-voltage electricity. Distribution lines then carry that electricity to the homes and businesses that use it.
The data center connection costs are split roughly equally, with $1.6 billion expected in transmission costs and $1.5 million in distribution costs.
The transmission costs for several individual projects each exceed $100 million, with one project alone expected to cost $289 million and another expected to cost $269 million.
Max Leichtman, ComEd’s director of economic and workforce development, said only the distribution costs are an appropriate apples-to-apples comparison for the $721 million in deposits.
Some of those projects won’t come online until 2030 or 2031 and are in early stages of development, so the full cost of equipment needed has not been calculated, he added.
“The deposits that today stand at $721 million may continue to increase as these projects move forward and become more mature and more well-defined,” Leichtman said. “That doesn’t mean that’s all we’ll ever collect.”
Leichtman said any remaining distribution costs would not be spread among all customers, but rather between similar types of customers in the large-user rate class.
Consumer advocates, though, say the data center developers cannot be taken at their word to pay the bills.
“These data centers are some of the wealthiest corporations in the world,” CUB spokesperson Jim Chilsen told reporters. “They always say, ‘Trust us, we’re going to pay our energy bills,’ but Illinois customers can’t afford to take big tech’s word for it.”
Reducing speculation
Hyperscale data centers’ requests for energy usage are often understood to be largely speculative. The massive projects — often operated by multibillion-dollar tech companies looking to compete in the race for artificial intelligence — sometimes place duplicate requests with different utilities, meaning some do not come to fruition.
The projects have also faced growing opposition from local communities in recent years, causing many to withdraw.
ComEd, in cooperation with Illinois and federal regulators, has sought to weed out speculative requests that drive up energy demand prices by requiring deposits for large customers and requiring them to sign long-term contracts known as transmission security agreements, or TSAs, that require customers to provide a line of credit guaranteeing payment of transmission rates for 10 years, even if the project does not materialize.
Regulators approved ComEd’s TSA requirement in 2025, meaning that projects after that point have them in place.
Of the total $1.6 billion in planned transmission costs, ComEd has $1.1 billion protected through transmission security agreements. Nineteen of the 30 projects pre-date the TSA requirement.
Implementing the TSAs has also resulted in “substantial attrition” of data center requests in ComEd’s queue, Leichtman said.
Payments now or later
Like many of the utility watchdogs, ComEd also endorses the idea that large-load customers like data centers should be directly allocated the cost of their projects.
The electric utility has proposed a new approach in which it would directly assign rates to individual data centers based on their costs rather than assigning costs within groups. ComEd says that proposal, in combination with the TSAs and deposit requirements, shows it has been proactive in protecting customers.
“We really believe that in totality, the suite of proposals that we put together are industry-leading,” Leichtman said.
But unlike its watchdogs, ComEd does not think the data centers should be asked to pay for the infrastructure costs up front, which it said would make it difficult for those customers to do business in Illinois.
Eric DeBellis, general counsel for CUB, agreed the TSAs are an improvement but said they would still leave a “substantial gap” that households and small businesses should not be left to pay.
“We don’t want to pay for grid bridges to nowhere,” DeBellis said. “If they don’t have these up-front payments, then we’re left footing the bill for all of it.”
Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
