Gov. Sherrill signs data center transparency bill, announces new guidance for N.J. municipalities
TRENTON, N.J. — Gov. Mikie Sherrill has signed legislation requiring data centers in New Jersey to report their energy and water use and announced new statewide guidance designed to help municipalities negotiate community benefits agreements with data center developers.
The actions complete the four components of Sherrill’s data center plan announced in May, according to the governor’s office. The plan focuses on energy costs, transparency, community benefits and labor standards as data center development expands across the state.
“At the beginning of this summer, I announced the most comprehensive data center plan in the nation to establish strong guardrails and hold data centers accountable. Just three months later, I am delivering on all four pillars of that plan — taking action so that towns across New Jersey know we have their backs,” said Governor Sherrill. “I am laser focused on driving down costs and making sure our state is more affordable. When it comes to data centers, we’re doing that by putting power back in the hands of communities and ensuring data centers play by our rules — paying their fair share for energy and contributing to the grid, being transparent about their energy and water usage, making meaningful investments in communities, and bringing good union jobs when they are building.”
The newly signed legislation, S3379/A4096, requires data center owners and operators to submit reports twice a year to the New Jersey Board of Public Utilities detailing their water and energy use.
The reports will include total energy consumption, energy used for cooling and information technology equipment, peak daily water use, water sources and information about on-site and backup power supplies.
Sherrill also announced statewide guidance from the Department of Community Affairs aimed at helping municipalities negotiate community benefits agreements, or CBAs, with developers proposing data center projects.
The guidance was sent to municipalities Aug. 25 through a Local Finance Notice and outlines how communities can use agreements to address the impacts of data centers and secure local investments.
Among the considerations are the effects on local infrastructure and resources, emergency response needs and potential community investments such as public infrastructure improvements, blight remediation, schools and workforce development programs. The guidance also addresses state labor standards, including prevailing wage and project labor agreement requirements.
The New Jersey Economic Development Authority has also established an online resource and technical assistance hub for municipalities. The BPU and state Department of Environmental Protection have established technical assistance teams to support communities considering data center projects.
The latest actions follow legislation signed in July establishing a separate ratepayer class and rate structure for data centers and requiring them to bring new clean energy resources online and contribute toward grid infrastructure needed to support their energy demands.
According to the Sherrill administration, the state’s four data center guardrails include requiring data centers to pay for their energy use and associated grid infrastructure; requiring semiannual reports on water and energy consumption; establishing statewide guidance for community benefits agreements; and applying state labor standards to data center projects, including prevailing wage requirements and opportunities for project labor agreements.
