Governor Pritzker Directs DCEO to Pause Data Center Investment Program Agreements, Effective July

June 5, 2026  

July 1 Deadline for Pending DCEO Agreements
Today, Governor JB Pritzker announced that he is directing the Illinois Department of Commerce and Economic Opportunity (“DCEO”) to pause processing all new agreements under the Data Center Investment Program beginning July 1, 2026. Governor Pritzker first signaled his intent to pause data center incentives during his February 2026 budget address, when he proposed a two-year suspension of state tax incentives for new data center developments effective July 1, 2026. In his budget address, the Governor cited concerns that surging data center demand was driving higher energy costs for Illinois families.

Notably, the Governor’s announcement confirms that existing incentive agreements, including those entered into with DCEO before July 1, 2026, will be honored. Any entity seeking to secure an agreement under the current program should engage DCEO immediately, as there are fewer than four weeks remaining before the pause takes effect.

The Governor’s Seven-Point Framework
Alongside the pause, the Governor outlined a comprehensive framework to guide legislative action during the upcoming veto session. The framework addresses seven areas:

  1. Fair Cost Allocation. Creation of a dedicated rate class for data centers and establishment of data center-specific electricity rates. It would assign to data centers the costs they impose on the electric grid such as distribution, generation, and transmission, and require them to bear the costs they impose on water systems. The framework would also set energy and water efficiency requirements using established standards.
  2. Pause on State Tax Incentives. The Governor’s framework calls for a pause on state incentives for data centers to allow the state to study whether those incentives are driving development that is insensitive to consumer costs and environmental impact.
  3. Energy Reliability Protections. Data centers would be assigned interruptible electric service during periods of grid strain, based on how much of their own clean energy they self-supply. Data centers that do not supply their own clean energy could have their electric service interrupted to maintain reliable service for other Illinois ratepayers.
  4. Clean Energy Self-Supply. Data centers would be required to generate or pay for their own new clean energy resources so that Illinois consumers are not left subsidizing their consumption.
  5. Water Resource Protections. Require data centers to acquire comprehensive water permits that account for, regulate, and disclose their water usage and impact on water quality. Data centers’ water use would need to be sustainable and not deplete water resources, with incentives for water reuse.
  6. Clean Air Standards. Preserve strong clean air standards for data center generators and account for cumulative impacts in permits in environmental justice communities.
  7. Community Transparency. Banning nondisclosure agreements between data centers and local governments, requiring regular reporting of energy and water use, requiring public notice when data centers apply for permits, and requiring data centers to enter into community benefits agreements with host communities.

Implications for Clients
The practical implications of today’s announcement are significant for data center developers, operators, and investors with current or planned projects in Illinois:

  • Pending Applications. Any applicant that has not yet entered into an agreement with DCEO under the Data Center Investment Program has until July 1, 2026, to finalize its agreement.
  • Existing Agreements Are Protected. The Governor has confirmed that existing incentive agreements, including those entered into with DCEO before July 1, 2026, will be honored. Companies operating under existing agreements should ensure they remain in compliance with current program requirements.

Next Steps
We will continue to monitor developments related to the DCEO pause and any legislative activity during the veto session. Clients with pending applications under the Data Center Investment Program should contact us immediately to discuss strategies for engaging DCEO before the July 1 deadline.