By Matthew Hersh
Gov. Mikie Sherrill signed legislation on Thursday, August 27, requiring data centers across New Jersey to report their energy and water consumption to the state. The new law was signed as municipalities continued to weigh proposals for facilities that would represent substantial increases in local energy and water demand.
Sherrill signed the law at the South Brunswick Public Library as South Brunswick has emerged among the New Jersey communities to become a focal point of New Jersey’s data center expansion, with a new data center underway near the former Princeton Nurseries property.
The law, S3379/A4096, requires data center owners and operators to submit reports to the New Jersey Board of Public Utilities twice a year. The reports must include total energy consumption; energy used by information technology equipment and cooling; peak daily water use; sources of water; and information about on-site and backup power supplies.
The legislation is the latest piece of Sherrill’s broader effort to establish state regulations around data center development, an effort she unveiled in May as communities were confronting the potential impacts of facilities that can require large amounts of electricity and water.
“At the beginning of this summer,
I announced the most comprehensive data center plan in the nation to establish strong guardrails and hold data centers accountable,” Sherrill said Thursday. “Just three months later, I am delivering on all four of those pillars — taking action so that towns across New Jersey know we have their backs.”
She said the state’s approach is intended to balance the economic opportunities associated with artificial intelligence with the costs imposed on communities and utility customers.
“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 — paying their fair share for energy and contributing to the grid, being transparent about their energy and water usage, making meaningful investments in communities, and bringing good union jobs when they are building.”
Alongside Thursday’s bill signing, Sherrill announced new statewide guidance from the Department of Community Affairs intended to help municipalities negotiate Community Benefits Agreements with data center developers.
The guidance, issued to municipalities August 25, outlines ways towns can assess the effects of proposed facilities on local infrastructure and resources and negotiate investments to offset those impacts and provide community benefits.
The state’s Economic Development Authority has also established a data center resource hub and technical assistance team for municipalities, with the Board of Public Utilities and Department of Environmental Protection providing additional assistance. The intention is to help towns evaluate issues including infrastructure, energy, water, and proposed community benefit agreements.
The guidance encourages municipalities to consider emergency-response and infrastructure needs, as well as potential investments in public infrastructure, blight remediation, schools, and workforce development. It also addresses state labor standards, including prevailing wage requirements and project labor agreements.
“Today, we are putting power back in the hands of communities and giving places like South Brunswick a real say in what comes next,” said South Brunswick Mayor Charlie Carley. “Community benefit agreements offer us the tools to hold data centers accountable and protect our residents, while ensuring our community isn’t left out of the innovation and economic opportunity they can bring.”
In July, Sherrill signed separate legislation creating a new ratepayer class and rate structure for data centers, intended to ensure that the facilities pay for their own energy use and associated grid infrastructure rather than shifting those costs to other utility customers.