Data center pitch vs. pushback: Metro-east towns weigh tax cuts, power rate risks
They’ve heard the pitch.
An interested developer and some local officials have repeated the potential benefits of a data center at public meetings over the past two months: It could bring a windfall of property tax revenue, with assurances that the cost of power infrastructure upgrades will not be passed on to other customers.
Residents in Troy — one of the metro-east communities that has been on a developer’s radar — recently organized their own meeting to offer a different perspective.
Speakers from the Citizens Utility Board, a state watchdog and consumer advocate, and from Caledonia, Wisconsin, where residents defeated a Microsoft data center proposal, challenged arguments about rewards and raised concerns about the potential risks of those developments.
The group Troy Residents for Responsible Growth invited people from across the region to attend its meeting in Edwardsville last week because the developer is exploring several locations for a potential data center.
Houston-based development company Cloverleaf Infrastructure has expressed interest in Granite City, Edwardsville and an unidentified St. Clair County community, in addition to Troy.
“You’ve heard from data centers,” residents’ group member Derrick Ramert told the crowd packed into the Edwardsville Moose Lodge. “You understand their messaging of the revenue that it will bring in. It’s basically a golden egg and if you don’t take it, you’re a fool. But what about the other side?”
Here’s a look at the different points of view on the two most controversial topics, utility bills and property taxes:
Will utility bills go up?
Connecting a data center to the power grid will require the electricity provider to upgrade or build new infrastructure such as power poles, substations and transformers.
Representatives from Cloverleaf assured Troy residents during a Feb. 10 meeting that a data center would not pass the cost of those infrastructure upgrades on to them.
Eric Whitfield, director of economic development for Ameren Illinois, shared the same message at a March 10 meeting in Granite City. Whitfield also suggested that the development could make residents’ Ameren rates go down because of the increased revenue coming to the utility from a data center’s large energy bills.
Unnamed developers have signed 850-megawatt construction agreements with Ameren Illinois, according to reporting by St. Louis Public Radio. Whitfield said he could not identify the developers or locations because of nondisclosure agreements.
“We can’t right now. We’re under NDA for both of those projects.” Whitfield said in an interview.
He noted that those agreements cover who will pay for infrastructure.
“For whatever infrastructure that needs to be built out to serve that project, it’s an agreement between us and that end user that they’ll pay for those construction upgrades,” he said.
Ameren’s electricity service regulations, known as tariffs, also require large industrial customers to pay for any power infrastructure they need, according to Whitfield.
But during the March 9 meeting organized by residents, Scott Allen, the energy policy specialist for the Citizens Utility Board, raised concerns about scenarios that could cause other customers to get stuck with the bill.
In an interview after the meeting, Allen said utilities like Ameren would only receive a fraction of the cost of infrastructure upgrades up front through a deposit under the current tariffs. Ameren recoups the rest of its investment over time, according to Allen.
The risk is that a data center may not remain a customer for enough years to cover the full price. Allen said a project could fall apart, or the artificial intelligence boom could end, making a data center obsolete.
“That down payment is not likely to cover the huge cost of infrastructure,” Allen said. “The utility is going to recover that money from somebody, and the data center can say ‘That’s your problem, not ours.’”
Ameren Illinois said in a statement that requiring an up-front deposit is “one of several tariff-based and contractual protections” to ensure developments pay for their infrastructure costs. It did not elaborate on any other protections it is employing.
Allen and Whitfield both told residents at meetings last week that data center developments built in neighboring communities and even other states could also impact electricity bills.
The central United States, from North Dakota to Louisiana, is on the same power grid. Prices can spike for everyone from data centers anywhere on the grid if power plants need to catch up to increased demand for electricity.
In a statement to the BND, the Midcontinent Independent System Operator, which oversees the grid, said it created “fast track processes” for power generation and transmission projects to meet data center demands.
“MISO is closely monitoring the growing interest in data center development across our footprint, including in Illinois and Missouri,” the grid operator stated. “We work closely with state and local officials, utilities and developers to ensure any new large loads are studied and integrated into the grid reliably.”
Will a data center bring tax relief?
Tax relief has been promoted as the biggest benefit to a community that accepts a data center development proposal.
Troy and Granite City have been estimating their potential revenue gains from the tax bills of the massive complexes — and how much they can lower residents’ bills as a result.
Granite City economic development director Cathy Hamilton shared her calculations with the community this month.
Hamilton said that with a data center, Granite City would surpass Edwardsville to become the community with the highest property value in Madison and St. Clair counties. She said Granite City is currently in sixth place, behind Edwardsville, O’Fallon, Collinsville, Belleville and Fairview Heights.
Her projections were based on a recent tax assessment of a data center in DeKalb, Illinois. In tax year 2024, the DeKalb facility paid $31 million in property taxes, according to Hamilton.
Mayor Mike Parkinson said that kind of revenue could allow the city to lower residents’ tax burden and help Granite City withstand the possible loss of its current top taxpayers: U.S. Steel and Sun Coke, whose futures remain uncertain.
Madison County Board Chairman Chris Slusser previously shared calculations with Troy showing tax bill savings of 30% to almost 40% from an estimated $37 million in new revenue from a data center. Slusser said his calculations were based on assessments of data centers in DeKalb and other places.
Hamilton’s estimates showed Granite City tax bills could be cut in half based on the DeKalb numbers.
“That’s been my goal as mayor: is to find ways to reduce your taxes and maintain jobs in this city and protect us for the future if that (steel) mill closes its doors. And God help us if it does and we don’t have other resources,” Parkinson told the crowd at the March 10 meeting. “So folks, I have to take a look at this. Whether we like it or not, I have to look at it to protect this city.”
Parkinson added that Granite City officials are still weighing the positives and negatives of data centers.
“They’re not all rosy,” Parkinson said. “... If it’s not good for us, we won’t do it.”
Prescott Balch is a Wisconsin resident who advises other communities after he and his neighbors organized to defeat a data center development in the village of Caledonia last year. He visited the metro-east in March to share a word of caution about tax revenue estimates.
“Don’t just look at a revenue number and think that it’s going to be really easy to get there and it’s going to stay there forever,” he said.
Balch, a former tech executive, called the industry volatile. He believes inflated expectations about artificial intelligence, which is driving a data center construction boom, will come crashing down like other financial bubbles.
He said he supports data centers, but not building them in small communities that might not be able to absorb the loss of tax dollars if the AI bubble bursts.
“If it’s 75% of your village’s revenue, are you going to take that risk?” Balch said. “It’s irresponsible. Technology changes too much.”
A large portion of revenue coming from one taxpayer also puts a community at risk of feeling pressured to give in to its demands, Balch added.
“They own you; they are the lion’s share of your revenue,” he said.
Granite City resident Judine Lux attended both meetings where city officials gave revenue projections and Balch warned about risks.
She said she has the same concern about data centers that she has about U.S. Steel.
“We don’t know how long they’ll be here,” Lux said.
Troy recently passed a six-month moratorium on data center proposals. During that time, officials will consider stricter zoning rules for those developments.
Granite City is also in the process of updating its zoning ordinance to account for data centers. Its planning commission will have a hearing on the topic at 7 p.m. Thursday, April 2, at The Mill, 1311 20th St., according to a public notice on the city website granitecitydatacenter.com.
This story was originally published March 20, 2026 at 5:00 AM.
