Data centers must report water, energy use under new law signed by Gov. Sherrill

Gov. Mikie Sherrill signed legislation Thursday requiring data centers to report their water and energy use to state energy regulators every six months, touting it as a highlight of her plan to “hold data centers accountable.”

Sherrill, a Democrat who pledged months ago to seek limits on data center construction, said during a bill signing ceremony in South Brunswick that she will not “let these developers operate in the shadows.”

“New Jerseyans deserve to know how much water and electricity the data centers coming into their community will use. Data center companies often treat their usage statistics like a trade secret,” she said.

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Data center critics have said their mammoth power needs are behind rising electric rates. Sherrill pledged during her campaign for governor last year to freeze those rates for New Jerseyans.

The law requires operators to disclose total energy consumption, energy used for cooling and IT equipment, peak daily water use, water sources, and backup power supplies to the state Board of Public Utilities twice a year. Bill sponsor Sen. Teresa Ruiz said the reporting requirement should be “the start of an ongoing public record” rather than a one-time disclosure.

That data would be summarized for public release, but a provision of the law limits how much of that information could be released to the public under the state Open Public Records Act.

Advocates say that carve-out undercuts the law’s transparency goal. Ben Dziobek, executive director of Climate Revolution Action Network, griped that state officials are claiming to offer “guardrails” for data center construction while declining to actually cap what data centers can build or consume. Companies will be able to report without any independent verification or audit, he noted.

He and other environmental activists said the legislation Sherrill signed does not go far enough. They have called for Sherrill to issue a statewide moratorium on all data center construction.

“Data center reporting for energy and water use after the damage is done is the antithesis of guardrails,” said Jaclyn Rhoads, executive director of the Pinelands Alliance. “New Jersey is paving the way for data centers to contaminate our air and waterways while leaving the public to suffer. We demand more of our government officials. Pass a moratorium now.”

Sherrill pushed back on the idea that a statewide moratorium would be the right approach, saying that data centers who want to build in New Jersey will “play by our rules.”

“We don’t have to choose between innovation and accountability, and we won’t,” she said.

More than three dozen New Jersey towns have voted to block new data centers, largely after public pressure from residents.

Sherrill also announced new state guidance aimed at helping municipalities negotiate community benefits agreements with data center developers. She said the agreements are meant to get towns and developers “on the same page” on issues like noise and lighting before construction starts, secure local infrastructure investments, and lock in prevailing wage and project labor agreement standards on the biggest projects.

“We know these companies drive a hard bargain, so I’m not going to leave communities on their own to negotiate,” she said.

She also signed legislation Thursday that would end a $500 million tax credit program that encouraged the development of new data centers, a program created under Sherrill’s predecessor in an attempt to lure AI companies to the Garden State.