New Jersey Expands Data Center Reporting Rules for Energy and Water Use

New Jersey Governor Mikie Sherrill on Aug. 27 completed the four pillars of the state’s data center strategy, signing legislation to expand transparency over data centers’ energy and water use while rolling out guidance and technical support to help municipalities negotiate stronger community benefits agreements. The actions build on July legislation requiring new data centers to provide their own clean energy while shielding other ratepayers from higher electricity costs.

The newly enacted legislation requires data center owners and operators to file reports twice a year with the New Jersey Board of Public Utilities detailing how much electricity and water their facilities consume. The disclosures will include total electricity use, power dedicated to cooling systems and computing equipment, peak daily water demand, water sources, and information on on-site and backup power systems. The reporting requirement is intended to give state regulators and the public greater visibility into how rapidly expanding data centers affect electricity and water resources.

The administration also released statewide guidance through the Department of Community Affairs to strengthen municipalities’ ability to negotiate community benefits agreements with developers. The guidance outlines ways to assess local infrastructure and emergency response needs while helping communities secure commitments for public infrastructure improvements, blight remediation, schools, workforce development, and compliance with prevailing wage and project labor agreement requirements.

In addition, the state is providing technical assistance through the New Jersey Economic Development Authority, the Department of Environmental Protection, and the BPU to help communities evaluate proposed projects and negotiate with developers.

The latest actions mark the completion of a comprehensive plan introduced in May as New Jersey sought to address the rapid expansion of data centers driven by artificial intelligence. The framework combines utility cost protections, environmental transparency, local oversight, and community investment requirements, reflecting a broad approach to managing future data center development.