Gov. Mikie Sherrill on Thursday signed legislation requiring data center owners and operators to file semiannual energy and water use reports with the Board of Public Utilities, completing a four-part regulatory framework she first announced in May.
The law, S3379/A4096, requires data centers to disclose total energy consumption, energy used for cooling versus IT equipment, peak daily water use, water sources, and on-site and backup power supplies. The reports go to the BPU twice a year.
Alongside the signing, the Department of Community Affairs issued statewide guidance to municipalities on negotiating community benefits agreements with data center developers.
The guidance covers assessing infrastructure and emergency-response impacts, negotiating investments such as blight remediation and workforce development and applying state labor standards including prevailing wage and project labor agreement requirements.
The N.J. Economic Development Authority has also launched an online resource hub and technical assistance team for municipalities, joining teams already established at BPU and the Department of Environmental Protection.
“I am laser focused on driving down costs and making sure our state is more affordable,” Sherrill said. “When it comes to data centers, we’re doing that by putting power back in the hands of communities and ensuring data centers play by our rules.”
The reporting requirement is the second of four guardrails Sherrill laid out in May. With this week’s actions, all four are now in place:
- Cost allocation: Signed in July, creates a separate ratepayer class for data centers so their energy costs don’t fall on other utility customers.
- Transparency: This week’s law requiring semiannual energy and water use reports to the BPU.
- Local negotiating leverage: DCA guidance issued this week helping municipalities negotiate community benefits agreements.
- Labor standards: Prevailing wage and project labor agreement requirements for data center construction, also issued this week via the DCA notice.
The bill drew praise from legislative leaders who sponsored it, including Assembly Speaker Craig Coughlin (D, Woodbridge).
“Data centers are increasingly a part of New Jersey’s conversation on energy affordability, and as their footprint grows, we have a responsibility to look into what that growth means for the residents and business owners relying on our shared resources,” he said. “We cannot make decisions that will affect our future in the dark, and that is exactly why the Legislature has remained focused on asking the right questions to make sure we have the best possible information in front of us.
I’m proud of the work we’ve committed ourselves to doing because, at the end of the day, it really does make a difference in the ability for a family to not just live in New Jersey but to build a life and thrive.”
Senate Majority Leader M. Teresa Ruiz (D-Newark) struck a similar note.
“New Jersey is a hub for innovation, but that growth cannot come at the expense of our residents’ wallets or our environment,” she said. “This bill is a commonsense measure to give policymakers the tools needed to protect consumers and manage our resources responsibly.
By implementing clear oversight, we can support sustainable growth without compromising the reliability of our power grid or the affordability of utility bills for New Jersey families.”
Data centers have emerged as a flashpoint in statehouses nationwide over their strain on power grids and water supplies.
