Governor Sherrill Signs Data Center Transparency Law, Completes Four-Part Plan
New Jersey Governor Mikie Sherrill signed legislation requiring data centers to disclose their water and energy use, completing a four-part statewide plan. This plan also includes a separate electricity rate structure for large data centers to prevent subsidies from other utility customers. The measures aim to increase transparency and accountability for data center development.
New Jersey Governor Mikie Sherrill signed legislation mandating data centers disclose their water and energy consumption every six months to the state Board of Public Utilities. This marks the completion of a four-part statewide plan initiated in May, aimed at increasing transparency and accountability in the rapidly expanding data center sector. The legislation requires reporting total energy use, IT equipment electricity, on-site power, total water use, and water sources for an initial three years, with potential for permanence.
Earlier, on July 7, Governor Sherrill signed the Data Center Fair Share law, which establishes a distinct electricity rate structure for large data centers. This measure aims to prevent residential and other utility customers from subsidizing the significant power and grid infrastructure costs associated with data centers, requiring utilities to directly assign these costs to data center operators. Senate Majority Leader Teresa Ruiz and Assemblyman Michael Venezia, sponsors of the transparency legislation, emphasized the importance of consistent reporting for state and local governments to better understand the industry's demands.
The Governor's plan also includes guidance for municipalities on negotiating Community Benefits Agreements with developers through the Department of Community Affairs and a new Data Center Municipal Resource Hub from the New Jersey Economic Development Authority. This hub offers technical assistance on grid filings, water projections, tax impacts, and benefits agreements. Additionally, the administration has issued guidance promoting prevailing wages and project labor agreements for data center construction.
During a Q&A session, Governor Sherrill rejected the idea of a statewide data center moratorium, a path New York has taken. She asserted that municipalities retain the authority to impose local restrictions if they choose. Allison McLeod of the New Jersey League of Conservation Voters underscored the necessity of transparency for officials to understand the industry's environmental and utility impacts, advocating against higher energy costs for families and small businesses due to large electricity consumers.