Sherrill Targets AI Data Centers In Four Point Plan

As data centers expand across the state, New Jersey Governor Mikie Sherrill on Thursday announced a statewide plan aimed at addressing the growing impact on energy demand, resource use, and local communities.

Sherill's plan is designed to hold data centers accountable while positioning New Jersey to lead in AI innovation.

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"Data centers are among the biggest drivers of energy costs, which I am working tirelessly to bring down. While many states are approaching this issue piecemeal, this is the first comprehensive plan to tackle it holistically. At the same time, New Jersey will take a thoughtful approach to harnessing investment, lowering costs for ratepayers, and leading on AI innovation," said Sherrill.

Sherrill said the measures would establish guardrails to protect communities, strengthen transparency, require investment in New Jersey’s energy infrastructure, and support good-paying jobs.

"By establishing these guardrails, we will hold data centers accountable, ensure they contribute their fair share, and make sure our communities not only benefit from the AI innovation happening in our state, but have a real hand in shaping it," said Sherrill.

Four-Part Plan

The plan has four main parts.

1. The state would establish fair-share rules so data centers bring new clean energy online and contribute to the grid infrastructure needed to support their growth. Sherrill said that the approach is intended to shift costs away from residents and ratepayers.
2. The proposal also calls for improved transparency, beginning with reporting requirements on energy and water use so the public has greater visibility into the impact of large-scale facilities.
3. Another part of the plan would develop statewide standards for Community Benefits Agreements and provide state resources so municipalities can negotiate from positions of strength.
4. The plan also calls for data centers to leverage local trades and pay prevailing wages in an effort to deliver good-paying jobs.
   

The plan is meant to address local effects, including light, noise, and pollution, while securing meaningful local investment.

Several towns in the state have already started moving to ban data centers in their municipalities.

Warren Township and Bernards Township, both in Somerset County, are looking at passing ordinances banning these data centers.

In Kenilworth, a $1.8 billion AI data center proposal drew intense debate at a packed Borough Council meeting over taxes, jobs, and environmental concerns.

Sherrill said the proposal builds on a broader affordability agenda and ongoing efforts to lower energy costs for New Jersey families by addressing major drivers of demand growth on the grid.

Those efforts included Executive Orders No. 1 and 2 to freeze rate hikes and expand power generation, along with approval of six large-scale solar and battery storage projects, an expansion of community solar to 3,000 MW, and legislation to accelerate battery storage deployment and lift the 50-year moratorium on new nuclear energy.

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