New Jersey Governor Sherrill proposes statewide regulations for AI data centers
New Jersey Governor Mikie Sherrill unveiled a comprehensive statewide strategy to regulate data center growth, citing their significant impact on electricity costs and the power grid. The plan aims to shift infrastructure costs to developers, require public reporting of resource consumption, and establish statewide standards for community benefit agreements. This initiative seeks to balance AI innovation with protections for residents from rising utility bills.
New Jersey Governor Mikie Sherrill announced a new statewide strategy on Thursday aimed at regulating the growing impact of data centers, which she identified as a major driver of electricity costs and strain on the power grid. Speaking in Trenton, Sherrill highlighted that data centers contribute to rising utility bills and increased water consumption, with regional grid operator PJM reporting that data centers accounted for 70% of projected demand growth last year.
The governor's proposal outlines a four-pillar framework, which officials described as the nation's first comprehensive statewide approach. Key aspects include requiring data center developers to bring their own energy supply online and fund necessary electrical grid upgrades, rather than shifting these costs to residents. Additionally, large facilities would be mandated to publicly report their energy and water consumption every six months to increase transparency.
The plan also involves establishing statewide standards for developers to negotiate community benefit agreements with municipalities, addressing concerns such as noise, traffic, and environmental impacts. These agreements could also secure local investments like open space preservation or renewable energy projects. Furthermore, the proposal encourages the use of union labor and prevailing wages for data center construction and operations jobs.
Assemblyman Dave Bailey and environmental groups voiced support for the initiative, emphasizing that residents should not bear the financial burden of tech companies' infrastructure needs and warning against potential strains on water supplies. Governor Sherrill underscored that the goal is not to block AI development but to position New Jersey as a leader in responsible AI infrastructure, safeguarding residents from unchecked growth and rising costs.