How Data Centers Affect Rural Electric Co-ops
With the recent vote-down of a data center moratorium resolution by the McDonough County Board, followed by a Community News Brief poll asking if readers supported data center in the county – with a resounding 926 voting 'no' out of 986 answering the question – the latest question is: how would a data center impact a rural electric cooperative in a small, west central Illinois community like Macomb?
The McDonough Power Cooperative (MPC) Board of Directors recently approved a policy to protect the cooperative, its grid, and its members from the risks posed by data centers and other 'computational load' operations, like bitcoin, to rural electric systems. According to Mike Smith, MPC president and CEO, the cooperative's needs, which has an 18-megawatt load at its peak, would be dwarfed by a data center, which can demand 25, 50, or even 100 megawatts of continuous power.
'A single facility could overwhelm the cooperative's capacity to serve existing customers,' Smith explained.
Under the new policy, Smith pointed out that any data center seeking service would be required to produce its own energy source before connecting to the grid would be considered. If a facility approaches the cooperative, they'll direct it to Prairie Power, the wholesale power broker that McDonough owns with other rural cooperatives.
'Data centers need a constant steady stream of reliable power around the clock,' he shared.
Ryan Litchfield, the county board member who led the charge urging his fellow board members to vote against the moratorium, is also a member of the MPC Board. Litchfield supported the cooperative's policy protecting its customers should a data center set up shop in the co-op's service territory. When asked if the moratorium and MPC policy go hand-in-hand to protect county residents and resources, Litchfield noted that his opposition to the county’s moratorium does not indicate 'unfettered support' for data centers.
'The power cooperative perspective on this topic is somewhat simpler, as it is really only concerned with the power demand component of large new loads. There are short-term and long-term implications to consider, and the policy does a great job addressing the meat and potatoes of each. It is perfectly legal and prudent for McDonough Power and Prairie Power to implement policy specific to their lines of business to protect members from the possibility of rate shocks from large new loads. The policy does not bar large new loads from our service area, it provides guidelines they must follow to negate negative impact to the broader community,' he explained.
'My view of the county moratorium is still twofold. First, data centers are a broad and general class of infrastructure that have both legitimate opportunities and causes for concern. A moratorium may cause developers to write off McDonough County as an option, eliminating us the chance of even having a conversation about a project proposal,' Litchfield added. 'Second, and this has not been discussed enough in my opinion, the county has no legal authority to pass a moratorium in the first place. Doing so would be acting ultra vires, and is not prudent for any level of government.'
Prior to the resolution first going to the board's Law & Legal Committee for consideration, Board Member Ken Durkin, who had brought the resolution forward, worked with McDonough County State's Attorney Matt Kwacala on the legality of the resolution. The failed resolution originally called for a two-year moratorium to give the county time; however, it was amended to one year and failed after a majority of the Board members voted no. Gov. J.B. Pritzker has proposed a statewide pause on data center tax incentives as of July 2026 to evaluate their impact on the power grid and utility costs for local residents.
When asked if the Board will revisit the moratorium or data centers in general, County Board Chair Eric Blakeley explained he believes the data center is 'somewhat of a moot point for the counties in Illinois since the Governor has put a hold on data center construction at the moment.'
'State laws override county laws, so the state is currently the driver on the data center sector. We do not have zoning in our county, so we have no legal authority on data centers,' Blakeley noted. 'I understand the public’s concerns over noise and power consumption issues. The water cooling has recently improved with new closed loop technology that circulates cooling water like the cooling system in a vehicle. Technology is improving daily, so noise and power issues will soon become less of an issue as time moves forward. I think our chances of getting a data center in our area are slim, and the state ordinance will guide us through the process, should we get one. '
Durkin said he had no further comment at this time other than he is hopeful the state will take up the issue during the November session.
As for the region's rural electric cooperative, which exists within the McDonough County Board's territory, Smith noted that his organization's policy also protects against a specific financial risk: 'stranded costs.' If a data center were built within the cooperative's service region, the cooperative might have to commit to purchasing power on the wholesale market to serve the load. If the facility closes or relocates, such as Pioneer Seed and Freeman Coal did years ago, MPC is left paying for electricity it can no longer sell. And those higher costs would be borne by their members.
'If a data center entered into our territory and broke their contract, it could leave us with stranded costs,' Smith said. 'We could be on the hook for paying for all of that energy that we purchased that is no longer being used.'
This risk circles back to requiring any data centers approved within their service region to bring their own power source, he again stated. The Midwest Independent Transmission System Operator (MISO), which manages the regional power grid from Louisiana all the way to Canada, with a large swath through the Midwest, has also imposed new requirements on large loads. Any facility that could put significant demand onto the grid must show how it will protect fluctuations and outages that could wreak havoc across a wide region.
'For example, say there is a data center built in Canton, on the Spoon River Cooperative. Any fluctuations or outages caused by the data center on that grid could causes issues on our grid,' he explained.
Even though the changes are coming rapid fire and there remain numerous unanswered questions, Smith said he believe the cooperative can coexist with data centers if there are clear terms set up front. But even with terms and policies in place, the stakes remain high as there's the risk of data centers driving up electricity costs for ordinary residents, particularly if the cooperative bears the risk of their arrival and departure.
'We're doing what we can to protect ourselves and our customers as data centers could certainly lead to higher bills for common folks,' Smith said.
One of the ways the cooperative would protect its members would require weekly billing – and collections – for large loads, which would be a change from the traditional 'after the fact billing.' This way, they get the money up front and also get paid immediately to avoid risks of nonpayment.
'As data centers evolve, requirements will change,' Smith concluded. 'We'll stay on top of it.'
