Savings of $250 Million Would Go Instead Towards Reducing Electric Costs

SUMMIT, N.J.— Assemblyman Andrew Macurdy, Assemblyman Balvir Singh, and State Senator Joe Cryan announced a plan to end hundreds of millions in tax credit incentives earmarked for artificial intelligence data centers in New Jersey. The proposal would recoup for the state $250 million in total. This savings would go instead toward ratepayer relief for residents hardest hit by increased utility costs, and toward investments in large-scale energy storage and community solar that will make the grid more efficient and lower bills in the long-term.

The announcement comes amidst rising concern throughout the state about AI data centers driving up utility costs, as well as the enormous profits reaped by the data center industry. Originally implemented in 2024, New Jersey’s “Next New Jersey” tax credit program set aside $500 million for AI data center incentives. The first $250 million was awarded for a data center expected to be built in Union County, which has attracted controversy.

This new bill is designed to lower rates as quickly as possible. Half of the savings, or $125 million, would go directly to New Jerseyans to offset their electricity bills. The other $125 million would be invested in energy storage and solar projects, which are among the fastest ways to increase energy supply.

The sponsors gave the following statements about the proposal:
“State government programs should be thoroughly scrutinized to ensure they are the most efficient and effective use of taxpayer dollars,” Assemblyman Macurdy said. “Tax credit incentives for large AI data centers, which use huge amounts of energy and other resources—driving up costs for residents—are no longer the best use of government resources in 2026. This bill will save the state $250 million and return that money to ratepayers and invest in clean energy generation and storage that will help drive down rates.”

“As energy costs continue to rise, New Jersey families should not be left subsidizing massive AI data centers owned by some of the wealthiest corporations in the world,” said Assemblyman Balvir Singh. “We need to prioritize people first, not corporations. We must ensure our state’s investments prioritize affordability, reliability, and long-term sustainability for residents. This proposal redirects resources toward direct ratepayer relief and clean energy solutions that can strengthen our grid, expand energy capacity, and help lower costs for working families across New Jersey.”

“New Jersey families are feeling real pressure from rising utility costs, and that has to be our priority,” added Senator Joe Cryan. “Subsidizing energy-intensive AI data centers at this scale is no longer the best use of taxpayer dollars. By ending these tax credits, we can redirect $250 million toward immediate relief for ratepayers and invest in energy storage to help lower costs over the long term. This is about putting residents first and making sure our resources are working for the people of New Jersey.