Who will pay for data centers’ growing electricity demands in NJ?
New Jersey regulators are developing rules under the Data Center Fair Share Act to ensure large data centers pay for the grid infrastructure and electricity costs they create. The New Jersey Board of Public Utilities will hold a public stakeholder meeting on Nov. 4, with written comments accepted through Nov. 13.
The New Jersey Board of Public Utilities is preparing regulations for implementing the Data Center Fair Share Act, signed by Gov. Mikie Sherrill. The rules would require large data center customers to pay costs tied to power lines, substations, system upgrades and potential stranded investments, while providing financial guarantees covering at least 85% of requested electricity supply for 10 years.
The board is seeking input on how to define large data centers, calculate guarantees, manage abandoned or delayed projects, and enforce electricity reductions during grid emergencies. A developer planning a large New Jersey facility supports making data centers pay their grid costs but wants guarantees phased in as projects grow, while Power Energy Solutions has urged the board to make residential solar and battery projects eligible for a demand-reduction program. The board must establish standards by July 2027, after which utilities will propose data center rates.