By Matthew Hersh
Rising energy costs in recent months have affected nearly every sector and every income demographic to the point where New Jersey’s newly-minted governor ran on placing a freeze on utility rate hikes.
But with an economy increasingly driven by artificial intelligence (AI), legislative leaders, local governments, and environmental advocates are pushing back on the sudden, and potentially costly, pivot toward AI data center development. The data centers — specialized, high-density facilities designed to run machine learning models — use an enormous amount of electricity. The average data centers require five to 10 megawatts, but large, hyperscale facilities often consume over 100 megawatts, equal to the electricity required to power roughly 80,000 households, according to the International Energy Agency.
This has residents, local and state leaders, and environmentalists concerned about the downstream effects of the data center proliferation.
This week, the New Jersey legislature advanced AI-related bills that would require energy usage plans for proposed AI data centers; require any electricity be generated from new, clean energy sources; and require the state’s Department of Environmental Protection study the short- and long-term effects of water use by large-scale data centers.
“Although AI data centers have huge potential for our economy, they should not come at the expense of New Jersey residents and our environment,” said State Sen. Bob Smith, who chairs the Senate Environment and Energy Committee. “These data centers must avoid pushing the state’s already stretched energy grid to the brink, which would drive up costs for consumers, businesses, and families. By ensuring these facilities have a clear energy usage plan, and are prioritizing clean energy, we can prevent rising costs for consumers while achieving our clean energy goals.”
A separate effort, led by Smith and State Sen. Linda Greenstein, calls on the District of Columbia and the 12 other states in the PJM Interconnection region to similarly require data centers to use electricity from new zero or low-emission sources. PJM Interconnection is the largest regional transmission organization in the U.S., managing the electric grid and wholesale electricity market for 67 million people across its coverage area, which includes New Jersey.
“While we work to address rising energy costs in the short term, we need to take a longer-term, regional perspective when it comes to ensuring that demand from new sources like data centers does not disproportionately harm average families,” said Greenstein.
A spokesperson for Mercer County confirmed that there are no formal, active proposals to construct data centers in Mercer County, but an effort just north of the county border is causing concern among residents — a data center under construction in South Brunswick near Mapleton Preserve on a 143-acre parcel that used to be part of Princeton Nurseries. That project calls for 400,000 gallons of diesel fuel to power the center’s emergency generators, causing concern among residents related to noise and pollution.
The prevalence of data centers has mobilized community opposition. Last month, a proposed 27,000-square-foot data center in New Brunswick’s industrial corridor was nixed following massive community protests, with the city voting to remove data centers as a permitted use and instead install a new park. Residents expressed concern over water use, energy use, and the residual impact on surrounding residential areas and school zones.
New Jersey Food and Water Watch, New Brunswick Area NAACP, New Jersey Sierra Club, and Climate Revolution Action Network were among the organizations opposed to the New Brunswick proposal.
The project was halted due to concerns over resident and environmental advocate concerns over high energy usage, water consumption, and impacts on the surrounding community.
Data center development is facing mounting resistance in communities across the country. This year alone, at least 25 projects were canceled because of resident pushback over worries that the facilities will drive up electric bills, consume vast amounts of water, and pollute the environment.
Critics of the proposals also cite tax incentives that typically come with data center development. Last November, the New Jersey Economic Development Authority granted a $250 million, performance-based tax break to CoreWeave, which is building a 392,600-square-foot, $1.8 billion data center in Kenilworth. The award is part of New Jersey’s AI tax credit program.