NJ lawmakers advance bills on impacts of AI data centers
Greater power demand sees energy prices spike
By: Katie Sobko
NorthJersey.com
USA Today Network - New Jersey
..... Three bills that deal with the impact of AI data centers on New Jersey;s energy grid cleared different committees in the state Senate on Thursday [05/22/2025 morning.
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This legislation advanced weeks before Garden State residents are set to see a spike in their energy bills. The state's utility rates are expected to rise by as much as $20 each month - or about 17% to 20% - because electricity auctions prices were higher as a result of greater demand and lower supply.
..... These rate hikes were approved by the state Board of Public Utilities in February. [2025]
..... The first bill, sponsored by state Senators John Burzichelli and Linda Greenstein, moved unanimously through the upper chamber's economic growth committee.
..... It requires the state's Board of Public Utilities to conduct a study on the effects of data centers on utility use and expenses.
..... Alex Ambrose of New Jersey Policy Perspective testified in support of the bill and called it "essential."
..... "At a time when affordability is out of reach for so many people in New Jersey, I appreciate that the state is taking action to address the root cause of state to develop and submit to the BPU a tariff for data centers. The tariff would have to be designed to ensure that non-data center ratepayers are protected form any increased costs that result from increased electricity demand caused by data centers as well as incentive data centers to develop and utilize methods to increase energy efficiency.
..... Dan Lockwood of PJM said the capacity market was approved by the Federal Energy Regulatory Commission and the rules for the auction were "found to be just and reasonable."
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"The higher capacity pricing resulting from last summer's [2024] auction signaled the tightening of electricity supply and demand across the PJM region," he said.
..... Burzichelli said "putting a tariff system in place will prepare us with a means to have these centers pay their fair share and offset any extra costs that get imposed on residents.
..... "We want to make sure that the high expenses of these energy consuming centers aren't falling onto the backs of everyday consumers," he said. "The tariffs would also provide an incentive for the centers to adopt practice that are more energy efficient and less costly."
AI stretches NJ's electricity supply
..... At a state Senate Legislative Oversight Committee meeting in March, [2025] state Senator Andrew Zwicher, that committee's chair, put the energy usage of data centers into perspective by saying they already use 2% of the energy globally.
..... "The environmental impact of AI is remarkable," he said. "Training a single large language model like OpenAI's ChatGPT consumes approximately 1,300 megawatt hours of electricity, the same amount use by 130 U.S. homes in a year,"
..... Katie Sobko covers the New Jersey Statehouse. Email: sobko@northjersey.com