NJ legislators approve bills on data centers
Arnold Korotkin
Data centers
The state Legislature also advanced three bills aimed at reining in data centers and studying the amount of electricity they consume, as lawmakers and residents push back on the industry’s growing footprint in the Garden State.
A bill called the “End Data Center Tax Credits Act” would slash the tax credit annually available under the Next New Jersey Program by half — from $500 million down to $250 million.
The measure would redirect some of the freed-up credit capacity to other programs, like cultural arts institutions, manufacturing, and energy storage projects.
The state Economic Development Authority has awarded $250 million in tax credits to one project, according to the bill. That project will not be impacted by the legislation, which will take effect immediately once signed.
NJ Sierra Club Director Anjuli Ramos-Busot applauded the bill’s passage, saying that if the state “truly seeks for data centers to contribute to the state-wide economy, this is the necessary starting point.”
The legislation advanced Tuesday in the Assembly 74-4 and in the Senate 35-3, with a few Republicans opposing it in both chambers.
Lawmakers passed another bill to shield ratepayers from the high electricity costs generated by large data centers by requiring the state’s electric utilities to develop special rates and standards for the biggest electricity consumers. The Board of Public Utilities would have 12 months to establish standards on how electric utilities provide service to large data centers and set a threshold defining “large data centers.”
New data center customers would have to guarantee they’ll pay at least 85% of the electricity they request for 10 years, and during grid emergencies, large data centers would be first in line for curtailment rather than residential customers, under the legislation.
The bill also mandates data centers to report annually to the BPU on their performance and pushes data center to bring their own clear power or storage online, giving priority grid interconnection to those that do. Data centers already approved for service before the bill takes effect would be exempt from some requirements.
That measure advanced out of both houses Tuesday along party lines.
The third bill — requiring data center owners to submit semi-annual water and energy reports to the state — passed with less pushback from Republicans.
The bill directs data centers to submit a water and energy usage report to the BPU annually for three years. That reporting must include whether a data center uses water from a public water system, the total and peak daily water input the data center uses for all functions, total energy consumption, all on-site power supplies, and the name of the electric public utility serving the data center, along with any service agreements.
BPU officials would be required to publicly post the information online within 30 days of receiving the reports.
Environmental activists said the data center bills passed Tuesday show that New Jersey is poised to become a “national model for meeting this moment and taking energy affordability seriously.”
“From reining in data center costs to expanding community solar and transmission projects, we’re grateful state leaders are taking steps to slow rising energy bills and ensure data centers bear the costs of their growing energy demand,” said Eric Miller, Evergreen regional director.