Data Center Bill Passes Assembly
Legislation designed to ensure that public utility customers are not burdened with subsidizing the energy costs of large load data centers recently passed the New Jersey General Assembly. It was introduced by New Jersey Assemblyman Dave Bailey, Jr., who represents Bridgeton and the western townships of Cumberland County, as well as Gloucester and Salem counties.
“Data center growth will drive up the cost of electricity if we don’t create guardrails,” Bailey said. “We want to make sure data centers pay for the energy they use and the infrastructure they need, not our constituents. This bill is about protecting ratepayers while supporting responsible economic growth.”
The bill would authorize the New Jersey Board of Public Utilities (NJBPU) to require financial guarantees to ensure that large-load data center customers pay for at least 85 percent of the service they request for a minimum of 10 years. It would also incentivize data centers to develop and utilize methods to increase energy efficiency. It would require regulated electric utilities to develop and apply special rules for large load data centers to protect non-large load data center customers from increased transmission and distribution costs.
The legislation would apply to data centers with a peak electricity demand of 100 megawatts (MW) or more.
The bill likely would not significantly impact DataOne, the new data center in Vineland, because Vineland Municipal Electric Utility (VMEU), as the sole municipally-owned utility in the state, is not regulated by NJBPU to the extent others are.
While NJBPU regulates the rates and service standards of investor-owned utilities like Atlantic City Electric or PSE&G, VMEU is primarily governed by the Vineland City Council. The Council approves the utility’s agreements, supply contracts, and rate changes.
VMEU maintains its own rate structures, which are historically around 30 percent lower than those of surrounding investor-owned utilities. VMEU owns and operates its own generation facilities and manages its own infrastructure. Also, the installation here is powered by “behind the grid” electricity, generated onsite by gas driven turbines.
Data One is leading the artificial intelligence data business with this breakthrough, as well as its capacity to reclaim and recycle the water needed to cool the giant servers. This prevents the need for the factory to draw unreasonable amounts of water from the municipal water supply and the aquifer, as most data centers currently do.
The bill will need to be passed by the state senate and signed by Gov. Sherrill to become law. The Senate passed its own version of the legislation. It also passed a resolution encouraging other states served by the NJ-PA-MD interconnect, the grid that serves this area, to pass similar laws regulating electric needs of the large centers.
