New Jersey Gov. Mikie Sherrill signed three bills on July 7 that aim to lower electricity prices and curb data centers' impact on them.
"I'm bringing accountability back to New Jersey energy and standing up to everyone who makes your families pay for their mistakes," Sherrill said at a press conference. "Our grid desperately needs upgrades to prevent blackouts."
The move comes as households across the region battle with rising power prices while an aging electric grid faces growing strain.
What happened?
Together, the bills address state oversight of certain transmission projects, utility earnings tied to regional grid participation, and how very large data centers are charged for power, the New Jersey Monitor reported.
Under one measure, the New Jersey Board of Public Utilities must create a distinct rate-setting system for data centers expected to use 50 megawatts or more. The goal is to prevent the costs associated with those giant facilities from being passed on to other customers.
A separate bill removes the extra 0.5% return utilities in New Jersey could collect for voluntarily joining a regional transmission organization such as PJM Interconnection, which coordinates the movement of wholesale electricity and the power grid for an estimated 65 million people across 13 states and Washington, D.C.
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The third bill requires additional state review for certain supplemental transmission projects and includes a faster approval option for more advanced technologies.
Why does it matter?
Power prices in New Jersey are shaped by PJM, so growing systemwide demand can drive higher costs. A major source of that growth has been artificial intelligence data centers.
Through PJM, New Jersey residents can see their monthly bills rise even when a huge data center is built elsewhere in PJM's region.
Sherrill said changes made at the state level are unlikely to fully fix the issue on their own, but she argued they could provide a model for the wider region.
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"I think we will act as a region to get these costs down because, yes, that is a big concern," Sherrill said.
High heat and stronger storms are putting additional stress on electric systems as demand for power rises. They can lead to higher costs, more pressure on existing infrastructure, and a greater risk of outages if upgrades are not carried out in a smart and affordable way.
What's being done?
The data center bill gives the Board of Public Utilities 12 months to write the new rules. Those rules must require large facilities to add their own new renewable power, prioritize other electricity users if the grid approaches its limits, and prevent ratepayers from paying for transmission built for data centers that later close.
"What we really want to do in the near term is enable local governments here in New Jersey to make good choices and have the power to hold data centers accountable," Sherrill said.
The second law targets what lawmakers see as an outdated cost add-on.
"We're also closing a loophole that has resulted in hundreds of thousands of dollars in added costs to New Jersey ratepayers due to an outdated federal policy," Assembly Speaker Craig Coughlin said before signing the bills.
Utilities will also face a state review process for some transmission work that had previously been handled mostly at the federal level. Supporters say that added scrutiny could help prevent unnecessary costs from being passed on to customers.
"We've seen them working to pass similar legislation," Sherrill added, suggesting New Jersey's approach could influence other states and spread.
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