Regulate data centers to prevent higher power rates, report urges

A report from the nonpartisan advocacy group New Jersey Policy Perspective asserts that data centers were a primary cause for the average 20% increase in electricity bills in New Jersey last year. Titled "Fools Gold: The Hidden Costs of AI Data Centers for New Jersey," the report calls for statewide reforms to moderate the impacts of these energy-intensive facilities, particularly the "at least eight artificial intelligence centers" currently under construction or proposed across the state. The group recommends that lawmakers and regulators define and regulate the size of AI data centers, enact specific power rules, restrict subsidies, and standardize energy-usage projections. Christine Guhl-Sadovy, president of the state Board of Public Utilities, acknowledged the importance of AI data centers for national security and economic growth in New Jersey. However, the report highlights concerns beyond electricity costs, including high-volume water use, energy generation pollution, noise from operations, and a low number of permanent jobs compared to construction roles. It notes that "some towns are moving to ban their construction," and activists are demanding more transparency. Peter Chen, co-author of the report, commented on the shifting perception of data centers, from perceived economic boons to entities with more recognized costs. The report emphasizes New Jersey's opportunity to set standards to protect energy affordability and air quality. The article also mentions recent legislative activity, with two data center-related bills advanced by lawmakers. One bill, S-3870, awaiting action by Gov. Mikie Sherrill, aims to allow for the siting of nuclear generating facilities. Another, S-2368, passed by the Senate and sponsored by Sen. Bob Smith (D-Middlesex), would exempt "balcony solar" devices from some regulations to provide "rate relief" to customers.