NJ Spotlight News
NJ lawmakers target energy-hungry AI data centers
Clip: 6/20/2025 | 5m 5sVideo has Closed Captions
As energy costs rise, data centers singled out for using huge amounts of electricity
With New Jerseyans facing steep hikes in electric bills, a new bill in Trenton is taking aim at a growing industry that has been singled out for driving up costs: artificial intelligence data centers.
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NJ Spotlight News is a local public television program presented by THIRTEEN PBS
NJ Spotlight News
NJ lawmakers target energy-hungry AI data centers
Clip: 6/20/2025 | 5m 5sVideo has Closed Captions
With New Jerseyans facing steep hikes in electric bills, a new bill in Trenton is taking aim at a growing industry that has been singled out for driving up costs: artificial intelligence data centers.
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Learn Moreabout PBS online sponsorshipThe rising cost of electricity are starting to show up in residents utility bills.
And at least some lawmakers are pointing to research that finds data centers are a big driver in the increased demand on the grid.
They're considering a number of bills to study their impact, and special rules for the centers would need to follow.
But a senior correspondent Joanna Gagis report for our Under the Dome series.
They'll have to balance that concern over energy use with the state's larger goal of becoming a national air.
We just want them to say, well, we're going to take ownership and responsibility for the potential impact upon the local ratepayer.
Assemblyman Dave Bailey has sponsored a bill that would create a rate structure in this case referred to as a tariff for any data centers potentially coming into New Jersey.
Data centers, power the programs that give us air search results and all the technology we hold in our hands on our smartphones and computers.
We've got to strategize.
We have to think into the future what are the positive impacts of this type of technology?
What are the potential negative impacts, especially on the ratepayer and the increased use of energy that will come about because of these data centers?
Data centers have come into focus as a possible culprit in the spiking energy costs we're about to experience following the last PJM Energy auction that created a 180% increase in electricity costs for the state.
One example is in Vineland, where a Dutch company plans to build a data center that could use up to 300 megawatts of power.
That's roughly a quarter of what PSEG produces at its Hope Creek nuclear plant in Salem County.
PJM bases its costs in the future.
So supply and demand costs on forecasting how much energy is going to be necessary.
Nobody knows right now how much electricity these data centers are going to use.
So what we need to do, what I think is a good regulator should do, is make sure that consumers are protected, regardless of how much electricity the data centers end up using.
And we can do that.
And I think this is where this package of bills comes comes in by requiring data centers to post deposits to make sure that they have long term contracts and that they're taking the service that they say they're going to take.
Abe Silverman is a professor at Johns Hopkins University who says the bill follows what other states have recently done, which essentially creates contracts with data centers that indicate an interest in developing in a state to allow for better planning.
But Republican lawmaker Assemblyman Christian Barranco says this bill looks good on paper but doesn't have much practical impact because data centers are already dependent on their own power sources.
A term called co-locating air.
Data centers are not able to be connected to the public grid because it will know that they in part, that's why they're co-locating and buying their own power sources.
He believes the spike in energy costs come from the state, not producing enough of its own power.
New Jersey needs generation now.
Six years ago.
Seven years ago, New Jersey generated 110% of the electrical energy that it consumed.
It was a 10% reseller of energy to Delaware, Maryland, Pennsylvania, whoever needed it.
Today, we generate almost just over 50% of the energy that we consume, which means that we're buying 47, 45% to 47% of our energy from out of state sources.
Ray Kantor with the N.J. Business and Industry Association also says the state's focus should be on expanding energy sources rather than what he believes is scapegoating data centers.
Granted, you know, data centers are large energy users, but so are launched by their factories, so or large hospitals.
What we need to do as a society going work without economic growth, we need to make sure that we build the energy supply, that we need more at nuclear power plants.
We believe that natural gas is a very efficient and clean source of energy.
It's also could be put online relatively quickly if we do it right.
Democratic Senator John Berman Celli believes we need to keep thinking about data centers and energy needs with a regional approach, because even data centers built in other states will impact New Jersey's costs.
Given our participation in PJM Regional Power grid.
All we know is that these will be extraordinary demands on power.
Not something we don't welcome, but it's got to be planned for.
If the states were better organized, maybe then a strategy could develop between the 13 plus the District of Columbia of how to tackle this.
Assemblyman Bailey says the state is fully invested in data centers coming here, but this allows for better planning.
His bill has moved out of committee in the Assembly but has a long way to go before becoming law.
For NJ Spotlight News, I'm Joanna Gagis.
Under the Dome is made possible in part by the Corporation for Public Broadcasting, a private corporation funded by the American people.
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