Sherrill signs three bills to lower NJ electricity costs
New Jersey Governor Mikie Sherrill signed three bills aimed at lowering electricity costs and mitigating the impact of data centers. The legislation includes creating a special rate-setting process for large data centers and requiring state approval for certain transmission infrastructure projects. These measures are intended to address rising electricity demand driven by artificial intelligence data centers.
New Jersey Governor Mikie Sherrill signed three bills on Tuesday to reduce electricity costs for residents and manage the impact of rapidly growing data centers. The legislation creates a separate rate-setting process for data centers consuming at least 50 megawatts, mandating that these large customers shield other ratepayers from their effect on electricity prices. This bill also encourages data centers to develop their own renewable energy sources and prioritizes other electricity users over data centers during peak demand.
A second bill eliminates a 0.5% bump in the return on equity that New Jersey’s electric distribution companies receive for joining a regional transmission organization like PJM. Federal policy currently offers this increase to utilities voluntarily joining such organizations, but the new state law makes membership mandatory, thereby removing the additional profit. Assembly Speaker Craig Coughlin noted this closes a loophole that has added hundreds of thousands of dollars in costs to ratepayers.
The third bill establishes two state-level approval tracks for supplemental transmission infrastructure, such as wires and poles, which previously largely fell under federal oversight. New Jersey was one of only two states in the PJM grid that did not require public convenience and necessity certificates for these projects. Senator John Burzichelli stated that this measure aims to prevent unnecessary transmission investments by utilities looking to increase profits. Governor Sherrill emphasized that while New Jersey is leading this legislative effort, other states are considering similar actions to manage regional electricity costs driven by AI data centers.