A controversial data center proposal in Naperville is set to once again come before the Planning and Zoning Commission Wednesday evening.
Developer Karis Critical’s plan calls for the construction of a 211,000-square-foot, 36-megawatt building, half of what it had initially requested, on the former Alcatel-Lucent site off Interstate 88. The land at 1960 Lucent Lane is zoned for office, research and light industry, a category that includes data centers, but the project needs city variance approval before it can move forward.
Ever since the proposal came to light, many Naperville residents have pushed back against the project. Data centers have been popping up around the suburbs of Chicago as the state makes an effort to bring these projects to Illinois.
The Naperville Sun spoke with a few experts to discuss what a data center is and the industry’s impact on the state. While not an exhaustive list, this article hopes to cover some questions readers may have.
What is a data center?
In its most basic form, data centers are warehouses with computers in them.
They serve as the backbone of the internet and society’s digital infrastructure. Anything you access online, such as electronic healthcare records and banking and financial transactions, are supported by data centers, according to Dan Diorio, vice president of state policy for the Data Center Coalition.
“But what happened is that these buildings with computers in them, which is basically what they were in the late 1990s, turned into successively larger and larger buildings,” said Andrew Chien, a computer science professor at the University of Chicago.
With the rise of generative artificial intelligence, some data centers are requiring more power to run their computing systems. Chien said the most power intensive one he has seen is a five-gigawatt data center (one gigawatt is equivalent to the power for the city of Philadelphia).
In 2001, a 36-megawatt data center would’ve been considered a large-sized data center, but in today’s era it’s considered more small to medium size, Chien said. A 36-megawatt data center is also the equivalent of about 20,000 homes in Naperville, which Brian Groth, Naperville’s electric utility director, confirmed.
Why do we need to build so many more data centers?
The data center boom is often associated with the increased use of artificial intelligence in society. That’s one driving factor, but it’s not the only one.
“As a society, we will generate twice as much data in the next five years as we did in the previous 10,” Diorio said. “Our digitization of the economy and of our everyday lives is leading to the need for increased digital infrastructure to help support that growing demand.”
The U.S. government also has a vested interest in adding more data centers to help keep sensitive information within its borders, Diorio said.
“We need to keep pace with other countries that are investing in this area heavily, and not just for economic competitiveness, but also for national security,” he said. “Our banking and financial records, our healthcare records, we want that secured here at home in the U.S.”
Why is a data center coming to my community?
Illinois has made a concerted effort to bring more data centers to the state through their Data Center Investment Program, which attracts large-scale data centers through a variety of sales and use tax exemptions, according to the Illinois Department of Commerce and Economic Opportunity.
“Illinois is one of 37 states throughout the country that have some kind of a tax exemption program for data centers, and so it makes it a very competitive state overall,” Diorio said.
According to the Illinois Governor’s office, the program has “delivered $15 billion in investment, thousands of construction jobs, and significant local property tax revenue.”
At the same time, the number of data centers coming to Illinois has posed challenges for the state on everything from water to energy usage. Data centers typically require significant amounts of water to cool their computer systems, which experts warn could lead to shortages and conflicts in parts of the Great Lakes region if not regulated properly.
Another issue is making sure the electricity grid can handle the amount of energy required to power all of these data centers.
“There’s no set of criteria of what is mandated in each municipality,” said Anna Markowski, Midwest director of climate and energy at the Natural Resources Defense Council. “It’s different in ComEd territory. It’s going to be different in Naperville. … The utilities are doing the best they can to make sure that these loads are brought on in a way that’s responsible.”
How close should data centers be to residential areas?
This depends on the size and scale of the data center, but Chien said that one effective way to introduce larger data centers into communities is to set up industrial districts for those companies.
“This could have a bunch of benefits. One is it separates it cleanly from these residential kinds of challenges,” Chien said. “Second, you need to put in large-scale power infrastructure and large-scale cooling infrastructure, and sometimes there can even be an issue with a little bit of noise. So it’s a good idea to put all these things together because it makes it easier for the data center companies.”
Why do data centers cause electricity bills to spike?
In some communities where data centers were added, residents have seen electricity bills spike. One reason is because after about 25 years of little to no growth in electricity consumption in the U.S., the nation’s electricity grid is suddenly seeing huge increases in consumption.
“When this large growth comes, of course, there’s a certain number of generation plants that have already been built, and there’s more competition for that supply, right?” Chien said. “So you see that in these wholesale markets. That’s not what you and I pay, but that’s what the big power companies pay to each other. Prices have already gone up significantly.”
That was true in the last annual auction for power grid operator PJM Interconnection, which Chicago is part of.
“So there’s already big signs that prices are going up and the simple reason for that is supply and demand,” Chien said.
Another element is the need to build more power lines to support data centers.
“And the way that utilities pay for these power lines is they pay them back over like a 30-year lifetime, right?” Chien said. “Collectively, the ratepayers have to pay that money, so when you have new construction, new construction tends to be more expensive than using the old stuff. So you see increases in the rates you need for that electricity. Therefore, all the prices go up.”
As a Naperville resident, will I see my electricity bill go up?
The city is actively working towards options to make sure residents will not see their electricity bills skyrocket should the data center be approved, according to Brian Groth, the city’s director of public utilities.
Every three years the city conducts rate studies. One of the main goals of those rate studies is to ensure that certain customer classes do not subsidize or are not subsidized by other rate classes.
“We’ve actually started looking at the potential for creating a new rate class for large customers to ensure that there is no cost shift between rate classes, or that other residents or businesses are not subsidizing a data center or another large load project,” Groth said.
All construction costs for interconnection of the data center are also paid for by the data center, Groth said. Those interconnection costs generally include things like cable directional and substation infrastructure, Groth said.
cstein@chicagotribune.com
