August 27, 2026

Governor Sherrill Delivers All Four Pillars of Data Center Plan, Puts Power Back in the Hands of Communities

This major milestone comes just three months after Governor Sherrill first announced her data center plan, giving communities across New Jersey the tools to hold data centers accountable while ensuring they can participate in and benefit from the AI innovation happening in the state. While states across the country continue to consider approaches to address the rapid growth and increasing impact of data centers, New Jersey has moved aggressively to put this comprehensive framework into action.

"At the beginning of this summer, I announced the most comprehensive data center plan in the nation to establish strong guardrails and hold data centers accountable. Just three months later, I am delivering on all four pillars of that plan — taking action so that towns across New Jersey know we have their backs," said Governor Sherrill. "I am laser focused on driving down costs and making sure our state is more affordable. When it comes to data centers, we're doing that by putting power back in the hands of communities and ensuring data centers play by our rules — paying their fair share for energy and contributing to the grid, being transparent about their energy and water usage, making meaningful investments in communities, and bringing good union jobs when they are building."

S3379/A4096 requires data center owners and operators to submit semiannual reports to the New Jersey Board of Public Utilities (NJBPU) detailing their water and energy use. The reports will provide greater transparency into data centers’ demands on the state’s energy and water resources, including total energy consumption, energy used for cooling and information technology equipment, peak daily water use, water sources, and on-site and backup power supplies.

The Governor also announced new statewide guidance from the Department of Community Affairs (DCA) on CBAs to give municipalities the tools to ensure they are in the strongest negotiating position with data center developers over proposed projects. This guidance was sent to municipalities on August 25, via a Local Finance Notice, and outlines how municipalities can leverage CBAs to help mitigate data center impacts, share in the economic benefits of these projects, and secure meaningful investments for their communities.

The guidance provides key considerations for evaluating impacts on local infrastructure and resources, assessing emergency response and infrastructure needs, and negotiating tangible community investments — from public infrastructure improvements and blight remediation to schools and workforce development programs. It also outlines state labor standards, including prevailing wage and project labor agreement requirements.

In addition to the guidance, the Economic Development Authority has established a resources and technical assistance online hub and has a team ready to provide support to communities. The BPU and DEP have also established technical assistance teams, all of which can be found on the EDA’s Municipal Resource Hub.

With the signing of today’s legislation and issuance of the DCA’s Local Finance Notice, the Sherill Administration has delivered on all four of the guardrails the Governor set forth in May:

• Establishing fair-share rules to ensure data centers bring new clean energy online and contribute to the grid infrastructure needed to support their growth, shifting costs away from residents and ratepayers rather than to them.
  • Signed legislation (S731/A796) creating a new ratepayer class and rate structure for data centers, ensuring they pay for their own energy use and associated grid infrastructure.
• Improving transparency starting with requiring reporting on energy and water use so the public has greater visibility into the impact of large-scale facilities.
  • Signed legislation (S3379/A4096) requiring every data center in the State to submit semiannual water and energy usage reports to BPU
• Developing strong Statewide standards for Community Benefits Agreements and providing state resources to ensure municipalities can negotiate from positions of strength, ensuring data centers address impacts like light, noise, and pollution while making meaningful local investments.
  • Issued Local Finance Notice through the Department of Community Affairs with guidance on Community Benefits Agreements and launched EDA’s data center community resource hub webpage
• Delivering good-paying jobs by ensuring these centers leverage local trades and pay prevailing wages.
  • Issued guidance on state labor standards for data center projects, including prevailing wage requirements and opportunities for project labor agreements via DCA’s Local Finance Notice

"Data centers are increasingly a part of New Jerseys conversation on energy affordability, and as their footprint grows, we have a responsibility to look into what that growth means for the residents and business owners relying on our shared resources," said Speaker Craig J. Coughlin. "We cannot make decisions that will affect our future in the dark, and that is exactly why the Legislature has remained focused on asking the right questions to make sure we have the best possible information in front of us. I'm proud of the work we've committed ourselves to doing because, at the end of the day, it really does make a difference in the ability for a family to not just live in New Jersey but to build a life and thrive."

"New Jersey is a hub for innovation, but that growth cannot come at the expense of our residents' wallets or our environment. This bill is a commonsense measure to give policymakers the tools needed to protect consumers and manage our resources responsibly,” said Senate Majority Leader M. Teresa Ruiz (D-Essex/Hudson). “By implementing clear oversight, we can support sustainable growth without compromising the reliability of our power grid or the affordability of utility bills for New Jersey families."

“When we talk about addressing energy affordability, data centers are a constant in the conversation, as they place new demands on our energy grid and water resources. We need a clearer picture of what that impact actually looks like here in New Jersey,” said Assemblyman Venezia (D-Essex). “Requiring consistent reporting will give us a clearer picture of the impact data centers are having. Reliable, State-specific information will also allow us to better understand those demands and plan accordingly. As this industry continues to grow, greater transparency will help us protect our resources, address affordability concerns, and make informed decisions about New Jersey’s energy future.”

"Today, we are putting power back in the hands of communities and giving places like South Brunswick a real say in what comes next," said South Brunswick Mayor Charlie Carley. "Community benefit agreements offer us the tools to hold data centers accountable and protect our residents, while ensuring our community isn’t left out of the innovation and economic opportunity they can bring. And with South Brunswick situated near some of the world’s leading academic and research hubs, these guardrails give us greater control over how that growth happens and position our community for long-term success. Under Governor Sherrill's leadership, municipalities across the state will be prepared to adapt to an ever-changing world."

"The rapid and unregulated development of data centers is a major threat to the pocketbooks of all New Jersey utility customers," said New Jersey Citizen Action Executive Director Dena Mottola Jaborska. "This legislation will help prevent data centers from causing rate hikes millions of New Jersey residents can no longer afford, and bring much-needed transparency and accountability to the development process. We thank Governor Sherrill and our Legislature for decisive action on this critical affordability issue. We look forward to continuing to work with all our elected officials to find affordable, effective and environmentally sound solutions to meet New Jersey's energy needs."

“Governor Sherrill is once again setting the example of how states can tackle the affordability and climate crises simultaneously,” said Evergreen Action Interim Vice President for States Eric Miller. “Strengthened oversight on data center resource usage and fair-share rules will help ensure these costs do not fall on everyday ratepayers. Robust community benefits agreements will help address both environmental and quality of life concerns, and clear guidance will encourage these facilities to bring good-paying jobs to the communities that choose to welcome them. We applaud both the Legislature and Governor for taking another step forward to greater transparency and protections for Garden State families, and our environment.”

“Requiring data center owners and operators to report their energy and water usage twice a year is common sense. You can’t manage what you don’t measure,” said Interim Executive Director Allison McLeod, New Jersey LCV. “This legislation gives us the transparency we need to understand energy and water usage, and to hold large load users accountable. We thank the Governor and legislators for protecting ratepayers and protecting our environment, both of which are essential to building a stronger New Jersey.”

“The Sierra Club celebrates Senator Ruiz’s and Assemblyman Venezia’s data center energy and water reporting bill being signed into law today by Governor Sherrill. We commend the legislature and the Sherrill Administration for continuing to make progress in holding data centers accountable and in regulating them. This legislation is a significant step in the right direction that will help us better understand the accurate strain large-load users can place on our electric grid and natural resources, specifically water supply. This is critical information that will improve data center transparency for the people of New Jersey,” said State Director Anjuli Ramos, NJ Chapter Sierra Club.