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Filmmurphy discusses clean energy at the 2026 New Jersey Budget address
Gov. Phil Murphy discusses clean energy efforts in New Jersey in his 2026 state budget speech.
The New Jersey Senator has advanced a trio of bills navigating regulations for AI data centers. The first bill requires the state utility commission to conduct an investigation into the impact of data centers on utility use and costs. The second bill requires a quarterly report from the data center owner or operator.
Three bills addressing the impact of AI data centers on New Jersey’s energy grid cleared various state Senate committees Thursday morning.
The law went on several weeks ago for Garden State residents to see a surge in energy bills. The state’s utility rate is expected to rise by $20 a month (about 17% to 20%) due to higher prices at electricity auctions as a result of increased demand and reduced supply.
The hike at these rates was approved by the State Utilities Commission in February.
What does the law do?
The first bill, sponsored by state Sens. John Bruzicelli and Linda Greenstein, moved unanimously through the Senate Committee on Economic Growth.
A state Utilities Commission is required to conduct an investigation into the impact of data centers on utility use and costs.
Alex Ambrose, from a New Jersey policy perspective, was testified in support of the bill, calling it “essential.”
“When affordable prices are out of reach for many people in New Jersey, I am grateful that the state is taking action to address the root causes of these issues,” she said. “I’m concerned that home payers like you and me are bearing the brunt of the costs of these data centers.”
The bill requires the investigation to determine whether rate payers are repeatedly making unreasonable increases in order to support the centre’s new transmission, distribution or generation facilities and calculate the portion of fees resulting from data facility requests.
“New Jersey is experiencing its own expansion in its data centers due to the growth of its AI-focused computer companies,” Greenstein said. “This intensive growth will affect the local grid, including the impact on energy and consumer costs on supply. We need to make sure these centres are paying an equitable share.
The bill must pass legislature and, in this case, pass the entire state Senate.
The second bill, sponsored by Sen. Teresa Lewis and state Sen. Renee Burgess, cleared the state Senate Environment and Energy Committee, with only Senator Parker voting against it.
The Act requires a quarterly report from the data center owner or operator to prepare and submit a water and energy usage report to the Utilities Committee, which includes basic information on data centers, energy and water use, performance indicators, and water use effectiveness.
The report will be published by BPU Online.
“Data centers consume an extraordinary amount of energy and water, using as much as hundreds of homes in a day,” Lewis said in a statement.
“As their growth continues to surge, we must be keen to assess the footprint and economic impact of their environment,” she said. Requiring reports on the water and energy consumption of these facilities provides the data needed to increase monitoring, accountability and create equitable policies that protect consumers and the environment. ”
The third bill also cleared the state Senate Environment and Energy Committee, with only space opposing it.
The bill, sponsored by Bruzicelli, is an “absolute response” to what Sen. Bob Smith, chairman of the committee, called “corruption by PJMs” at the capacity auction.
Each electrical utility in the state is required to develop and submit data center duties. Tariffs should be designed to protect from the increased costs resulting from increased electricity demand caused by data centers, and from the increased costs resulting from encouraging data centers to be used to improve energy efficiency.
PJM’s Dunlockwood said the capacity market was approved by the Federal Energy Regulation Commission and the auction rules were “find to be fair and reasonable.”
“The high capacity pricing caused by auctions last summer shows tightening of electricity supply and demand across the PJM region,” he said.
Burzichelli said, “By installing a customs system, we will provide these centres with a fair share and provide a means to offset the additional costs charged to residents.
“We want to make sure that the high costs of these energy consumption centres are not falling on the backs of everyday consumers,” he said. “Taxes provide an incentive for centers to adopt more energy-efficient and costly practices.”
AI will increase NJ’s power supply
At the state Senate’s Legislative Oversight Committee meeting in March, Sen. Andrew Zwicker, chair of that committee, made the outlook, stating that the data center’s energy usage is already using 2% of energy globally.
“The environmental impact of AI is incredible,” he said. “Training a single large language model, like Openai’s ChatGPT, consumes approximately 1,300 megawatts of power, which is used in 130 US homes a year.”
Katie Sobko covers the New Jersey State Capitol. Email: sobko@northjersey.com
