Lower Data Center Energy Costs in Chicago

Chicago's data center market—anchored by 350 Cermak's historic carrier hotel, expanding hyperscale campuses in suburbs, and 50+ colocation facilities—represents the nation's premier Midwest connectivity hub with electricity costs representing 60-70% of operating expenses. Strategic energy management directly impacts colocation provider profitability, customer pricing competitiveness, and market positioning in one of North America's fastest-growing data center markets.

This comprehensive guide addresses Chicago-specific data center power management, covering strategies for optimizing multi-tenant colocation facilities, navigating 350 Cermak's unique power challenges, maximizing raised floor cooling efficiency, and strategically managing ComEd commercial rates. We demonstrate how facilities consistently achieve 20-35% energy cost reductions while improving reliability and customer satisfaction.

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Sources:

• City of Chicago Energy Benchmarking
• ComEd Large Customer Programs
• Data Center Knowledge - Chicago Market

Chicago's Colocation & Data Center Market

Chicago's evolution from 350 Cermak's carrier hotel origin to modern hyperscale campuses creates diverse energy optimization opportunities across facility types, vintages, and operational models.

Market Structure and Characteristics

Historic Carrier Hotels:

• 350 Cermak (600 S. Federal): 1.1M sq ft former printing facility, 70+ carriers, retail colocation
• 427 S. LaSalle: Financial district connectivity hub
• 717 S. Wells: Carrier neutral interconnection facility
• Characteristics: Legacy infrastructure, multi-tenant complexity, downtown locations, high power density zones

Modern Colocation Campuses:

• Digital Realty: Multiple Chicago-area facilities totaling 250+ MW
• QTS Chicago: 150+ MW across multiple buildings
• Aligned Data Centers: Purpose-built hyperscale
• CyrusOne: Expansion in Franklin Park and Aurora
• Characteristics: Purpose-built infrastructure, efficient design, suburban locations, hyperscale capability

Enterprise Data Centers:

• Financial services (Chicago Mercantile Exchange, major banks)
• Healthcare systems (Northwestern, Rush, Advocate)
• Professional services and headquarters operations
• Characteristics: Owned/operated by end users, mission-critical applications, high reliability requirements

Chicago Energy Cost Drivers

ComEd Rate Structure:

• Energy charges: $0.04-0.06/kWh (wholesale + distribution + transmission)
• Demand charges: $8-18/kW/month depending on rate class and voltage
• Capacity charges: PJM capacity costs passed through (~$10-15/kW/month)
• City of Chicago utility tax: 5% on total electric costs
• Total all-in cost: $65-85/MWh for large users with good load factor

Comparison to Suburban Markets:

Location	All-In Rate	vs. Downtown
Downtown Chicago	$75-85/MWh	Baseline
Elk Grove Village	$65-75/MWh	-12-15%
Aurora	$65-75/MWh	-12-15%
Joliet	$62-72/MWh	-15-18%

Real Estate Premium: Downtown locations command higher lease rates ($25-40/sq ft net) vs. suburban alternatives ($12-22/sq ft), but offer superior connectivity and lower latency to financial district customers justifying premium for some applications.

Chicago Energy Benchmarking Ordinance

Chicago mandates annual energy reporting for buildings >50,000 sq ft:

Requirements:

• Annual benchmarking in ENERGY STAR Portfolio Manager
• Public disclosure of energy performance
• Compliance documentation to city
• Failure to comply: Fines up to $5,000

Data Center Implications:

• Many data centers previously exempt now required to report
• Public disclosure creates competitive transparency (and pressure)
• Provides baseline for improvement tracking
• Drives customer sustainability requirements

Strategic Response: Leading facilities leverage benchmarking as marketing asset:

• Publish excellent PUE performance vs. competitors
• Demonstrate year-over-year efficiency improvements
• Use data to attract sustainability-focused customers
• Qualify for LEED Data Center certification or ENERGY STAR recognition

350 Cermak Power Optimization

350 Cermak's unique position as historic multi-tenant carrier hotel creates distinct energy management challenges and opportunities requiring specialized approaches.

Facility Characteristics

Building Profile:

• 1.1M sq ft former R.R. Donnelley printing facility
• 12 stories, constructed 1912-1929
• Converted to data center 1999-2000
• 70+ carriers, 200+ service providers
• Multiple data center operators (Digital Realty, Telx, others)
• Mixed-use including colocation, interconnection, office

Power Infrastructure:

• ComEd 138kV utility service
• Multiple substations and distribution systems
• Mix of UPS generations and technologies
• Raised floor cooling throughout data center floors
• Legacy mechanical systems with modern upgrades

Energy Management Complexity:

• Multiple tenants with independent operations
• Common area energy allocation disputes
• Legacy equipment mixed with modern systems
• 24/7/365 uptime requirements limiting maintenance windows
• Historic building constraints (structural, code, aesthetics)

Optimization Strategies for Multi-Tenant Facilities

Sub-Metering and Cost Allocation:

Multi-tenant facilities require accurate energy measurement and fair cost allocation:

Tenant-Specific Metering:

• Install revenue-grade meters at each customer demarcation
• Measure both IT load and allocated cooling/power distribution
• 15-minute interval data enabling time-of-use billing
• Real-time dashboard access for customer transparency

Common Area Allocation: Allocate shared infrastructure costs fairly:

• Base building HVAC: By square footage
• Elevators and lighting: By square footage
• Cooling infrastructure: By IT kW load
• Power distribution losses: Proportional to consumption
• Administrative: Fixed per-tenant fee

Benefits:

• Eliminates cost allocation disputes
• Provides customers visibility driving their conservation
• Enables accurate capacity planning
• Supports tiered service offerings (standard vs. premium efficiency)

Investment: $2,000-5,000 per tenant meter + backend systems Payback: 6-18 months through reduced disputes and customer energy reduction

Common Area Efficiency:

Building owner controls common areas offering substantial savings:

LED Lighting Retrofit:

• Replace T8/T12 fluorescent in corridors, stairs, loading docks
• Occupancy sensors in low-traffic areas
• Daylighting controls near windows
• Savings: 60-75% lighting energy
• Investment: $1.50-3.00/sq ft
• Payback: 2-4 years

Elevator Optimization: Historic buildings typically have inefficient elevator systems:

• Regenerative drives capturing braking energy
• LED cab lighting replacing incandescent
• Standby mode during low-traffic periods
• Savings: 25-40% elevator energy
• Investment: $50,000-150,000 per elevator
• Payback: 4-8 years

Office Area HVAC: Non-data center space often overconditioned:

• BAS controls with zone-level management
• Scheduling aligned with actual occupancy
• Economizer operation during shoulder seasons
• Savings: 20-35% office HVAC energy
• Investment: $3-8/sq ft
• Payback: 3-6 years

Power Factor Correction:

Older facilities often have poor power factor (0.75-0.85) resulting in utility penalties:

Power Factor Issues:

• Legacy UPS systems with lower power factor
• Diverse equipment creating reactive power demand
• ComEd power factor penalty: 0.5% for each 0.01 below 0.95

Correction Strategies:

• Install capacitor banks at service entrance
• Deploy active power factor correction at large loads
• Upgrade UPS systems to modern high-PF units
• Target power factor: >0.95

Economics:

• Typical facility with 0.82 power factor pays 6.5% penalty
• For $4M annual energy cost = $260,000 unnecessary expense
• Correction investment: $150,000-300,000
• Payback: 8-15 months

Tenant Engagement Programs

Multi-tenant facilities achieve greater savings through customer engagement:

Energy Dashboards: Provide tenants real-time consumption visibility:

• Current power draw (kW)
• Cost per hour/day/month
• Comparison to similar tenants
• Historical trending

Best Practices Documentation: Educate customers on efficiency:

• Server virtualization and consolidation
• Blanking panels on empty rack spaces
• Proper airflow management
• Equipment end-of-life replacement planning

Incentive Coordination: Aggregate tenant participation:

• Group ComEd incentive applications
• Coordinate free assessments
• Negotiate volume equipment pricing
• Share implementation case studies

Green Colocation Certification: Market sustainability leadership:

• LEED for Data Centers
• ENERGY STAR certification
• Renewable energy procurement
• Carbon offset programs

Raised Floor Cooling Efficiency

Raised floor distribution systems, common in Chicago's legacy facilities, require specialized optimization approaches for maximum efficiency.

Raised Floor System Components

Underfloor Plenum:

• Typically 18-36 inches deep
• Serves as cold air distribution path
• Must maintain adequate static pressure (0.05-0.10" WC)
• Cable routing creates air obstacles

Perforated Floor Tiles:

• Variable perforation percentages (25%, 40%, 60%)
• Strategic placement delivering cold air where needed
• Tile selection based on heat load distribution

CRAC/CRAH Units:

• Push cold air into underfloor plenum
• Draw return air from overhead hot aisle
• Create pressure and airflow driving distribution

Common Raised Floor Inefficiencies

Bypass Airflow:

Cold air taking path of least resistance rather than reaching IT equipment:

Sources of Bypass:

• Unsealed cable cutouts (typically 10-30% of floor area)
• Missing or poorly fitted perforated tiles
• Gaps around equipment pedestals
• Open areas with no IT load
• Inadequate plenum static pressure

Impact:

• 30-50% of CRAC airflow bypasses IT equipment
• Requires overcooling to maintain temperatures
• Increases fan energy and mechanical cooling load
• Creates hot spots from inadequate cold air delivery

Mitigation:

• Seal all cable cutouts with brush grommets ($15-30 each)
• Install blanking tiles in open areas ($50-100 each)
• Proper tile selection and placement
• Maintain recommended plenum pressure
• Typical savings: 20-35% cooling energy
• Investment: $5,000-25,000 depending on facility size
• Payback: 4-12 months

Improper Tile Placement:

Perforated tiles often misaligned with IT equipment cooling needs:

Issues:

• High-heat-density racks with low-perforation tiles
• Low-heat areas with high-perforation tiles
• Perforated tiles in cold aisles (correct) and hot aisles (incorrect)
• Tiles at end of aisles allowing bypass

Optimization Process:

1. Map heat density across entire floor
2. Measure airflow at each tile location
3. Calculate required airflow for each rack
4. Match tile perforation to heat load
5. Re-distribute tiles optimizing air delivery

Investment: Minimal (labor only for tile redistribution) Benefit: 10-20% cooling energy reduction Payback: Immediate (labor-only investment)

Hot Aisle Containment Implementation

Preventing hot exhaust mixing with cold supply dramatically improves efficiency:

Containment Options:

Curtain Systems:

• Flexible vinyl curtains suspended from ceiling
• Quick installation, minimal structural impact
• Cost: $50-100 per rack
• Aesthetic concerns for customer-facing areas

Rigid Panel Systems:

• Hard-sided enclosures with doors
• Professional appearance
• Better fire safety and acoustic properties
• Cost: $200-500 per rack

Chimney Systems:

• Ducts on individual racks channeling exhaust upward
• Flexible for mixed-use floors
• Higher cost per rack
• Cost: $300-700 per rack

Implementation Considerations:

• Fire suppression modifications required
• Access control and safety during emergencies
• HVAC controls responding to contained environment
• Incremental deployment minimizing disruption

Results - 350 Cermak Floor Containment Project:

• 40,000 sq ft data center floor, 600 racks
• Rigid hot aisle containment installation
• Investment: $240,000 (inclusive of fire suppression modifications)
• Energy savings: 28% cooling energy reduction = $180,000 annually
• Additional benefit: 15% capacity increase without new cooling equipment
• Payback: 16 months

Variable Speed Fan Control

Legacy CRAC units operate fans at constant speed regardless of cooling demand:

VFD Implementation:

• Install VFDs on CRAC fan motors
• Control based on temperature and pressure
• Modulate speed matching actual cooling load

Fan Affinity Laws:

• Power consumption follows cube of speed
• 80% speed = 51% power consumption
• 60% speed = 22% power consumption

Typical Scenario:

• 20 CRAC units × 15 kW fan = 300 kW total
• Average loading allows 70% speed operation
• 70% speed = 34% power = 102 kW (vs. 300 kW)
• Savings: 198 kW × 8,760 hrs = 1,735 MWh annually
• Cost savings: $113,000 annually
• Investment: 20 VFDs × $5,000 = $100,000
• Payback: 11 months

ComEd Commercial Rates & Demand Charges

Strategic rate selection and demand management significantly impact data center electricity costs.

ComEd Rate Options for Large Users

Real-Time Pricing (RTP):

Available for loads >1 MW, provides direct PJM wholesale market exposure:

Structure:

• Hourly energy prices reflecting wholesale costs
• Fixed distribution and transmission charges
• Day-ahead and real-time pricing options
• Price volatility: $15-250/MWh typical range, extreme events to $500+/MWh

Best For:

• Facilities with load flexibility
• Sophisticated energy management
• Risk tolerance for price volatility
• Ability to hedge or respond to high prices

Hedging Strategies:

• Block purchases for baseload coverage
• Call options for price cap protection
• Demand response reducing extreme-price exposure
• Battery storage discharging during price spikes

Watt-Hour Service (Standard Rates):

Traditional tariff with energy and demand charges:

Rate Components:

• Customer charge: $1,500-5,000/month (varies by service level)
• Energy charge: $0.025-0.035/kWh
• Distribution demand: $5-10/kW/month
• Transmission demand: $3-8/kW/month
• Total: $65-75/MWh for facilities with good load factor

Demand Charge Management:

Monthly demand charge based on single 15-minute peak during billing period:

Example - Demand Charge Impact:

• Facility: 8 MW average, 9.2 MW peak (15% above average)
• Demand charges: 9.2 MW × $15/kW/month × 12 = $1.66M annually
• If peak reduced to 8.5 MW: 8.5 × $15 × 12 = $1.53M
• Savings: $130,000 annually from 0.7 MW peak reduction

Demand Reduction Strategies:

Peak Monitoring and Alerts:

• Real-time demand monitoring
• Automated alerts at 90%, 95% of monthly peak
• Operator response protocols
• Investment: $10,000-25,000
• Savings: $50,000-200,000 annually

Load Shifting:

• Schedule maintenance during low-demand periods
• Defer non-critical loads during potential peak hours
• Pre-cool facility before anticipated peaks
• Battery storage discharge during peaks

Capacity Management:

• Incremental customer on-boarding avoiding demand spikes
• Proactive customer communication during facility peaks
• Backup generator testing during low-demand periods

Negotiated Economic Development Rates

Major deployments (>25 MW) may negotiate custom rates with ComEd:

Incentive Components:

• Discounted distribution charges
• Demand charge reductions or waivers
• Infrastructure cost-sharing for utility upgrades
• Expedited interconnection processing

Qualification Requirements:

• Substantial capital investment ($100M+ typical)
• Significant job creation (100+ jobs)
• Long-term commitment (10+ years)
• Economic development impact study

Process:

• Engage ComEd economic development team early in planning
• Conduct feasibility study and site analysis
• Negotiate incentive package and rate structure
• Illinois Commerce Commission approval for special contracts

PJM Demand Response and Capacity Markets

Large facilities can generate revenue through PJM programs:

Economic Demand Response:

• Get paid for reducing load during high wholesale price periods
• Typical: 5-15 events per year, 2-4 hours each
• Compensation: Wholesale price minus strike price
• Annual revenue: $50,000-200,000 for 5 MW curtailment capability

Capacity Performance:

• Commit to load reduction during PJM system emergencies
• Penalty for non-performance
• Annual revenue: $100,000-300,000 per MW committed
• Requires reliable load reduction capability (backup generators, load shedding)

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Final Recommendations for Chicago Data Center Optimization

Chicago's unique data center market—combining historic carrier hotels, modern hyperscale campuses, and financial district connectivity requirements—demands sophisticated energy management approaches tailored to facility type, customer mix, and competitive positioning.

Key Success Factors:

Multi-Tenant Metering: Implement comprehensive sub-metering providing tenants visibility into consumption while enabling fair cost allocation. Facilities without tenant-level metering miss engagement opportunities and face allocation disputes reducing customer satisfaction.

Raised Floor Optimization: Legacy facilities with raised floor cooling should systematically address bypass air, tile placement, and containment delivering 25-40% cooling savings with minimal investment. These improvements often also increase saleable capacity deferring major infrastructure additions.

Containment ROI: Hot aisle containment in existing facilities typically achieves 12-24 month payback while providing capacity increase and improved customer experience. New construction should design containment from inception reducing implementation cost.

Rate Strategy: Facilities >1 MW should evaluate real-time pricing with appropriate hedging vs. standard tariffs. RTP can save 10-25% on energy costs for sophisticated operators comfortable managing price volatility and implementing demand response.

Benchmarking Compliance: Chicago Energy Benchmarking Ordinance creates both compliance obligation and marketing opportunity. Leading facilities leverage strong performance as competitive differentiator attracting sustainability-focused customers.

Tenant Engagement: Multi-tenant facilities maximizing customer participation in efficiency initiatives achieve 30-50% greater savings than infrastructure upgrades alone. Energy dashboards, best practice sharing, and incentive coordination create partnership culture driving continuous improvement.

Economic Development Leverage: Major expansions >25 MW should engage ComEd economic development early in planning process. Negotiated rate structures and infrastructure cost-sharing dramatically improve project economics while expediting deployment.

Chicago data center operators implementing these strategies consistently achieve 20-35% energy cost reductions while improving reliability, capacity utilization, and customer satisfaction. Start today by installing comprehensive metering, conducting raised floor assessment, and evaluating ComEd rate alternatives for your facility profile. The market demands efficiency, customers expect sustainability, and competitive advantage requires action.