The Senate Environment and Energy Committee this afternoon passed a bill that would require all electricity for certain artificial intelligence (AI) data centers and cryptocurrency mining facilities to be derived from new verifiable Class I renewable energy, energy from newly constructed nuclear power plants, or a combination thereof, such that there is no net decrease of verifiable Class I renewable energy and energy from nuclear power plants supplied to the transmission and distribution system, as measured on an hourly basis.

"This bill says 'bring your own increase,'" said Senate Environment Committee Chairman Senator Bob Smith (D-17). "This is about rate relief, if anything. It's not saying 'don't come here,' just pay for your own increase."

Senator John McKeon (D-27) summed up the bill as AI enabling in the name of making NJ competitive - without burdening ratepayers.

From the bill (S-680):

The bill would require any person submitting an application for local development approval for the establishment of an AI data center or cryptocurrency mining facility within the State to simultaneously prepare and submit an energy usage plan to the BPU for approval if the BPU finds that a majority of the states in the PJM region require all electricity supplied to an AI data center or cryptocurrency mining facility to be derived from energy sources, such that there is no net decrease in energy supplied to the
transmission and distribution system.  The energy usage plan would be required to include, at a minimum, procedures that the AI data center or cryptocurrency mining facility will utilize to:

     (1) derive all electricity from new verifiable Class I renewable energy, energy from newly constructed power plants, or a combination thereof;

     (2) minimize the amount of energy that is used to cool computers by optimizing the layout of the room, ventilation, and cooling systems;

     (3) optimize water usage, including the process the AI data center or cryptocurrency mining facility plans to use to source water in a manner that has the least negative impacts to the environment and to drinking water;

     (4) ensure that ventilation and weatherproofing of the building is optimized to minimize energy usage; and

     (5) utilize the heat generated by the computers in the AI data center or cryptocurrency mining facility for water or space heating in the AI data center, cryptocurrency mining facility, or adjacent buildings.

No later than 90 days after receipt of an energy usage plan, the BPU would be required to make a determination to approve the plan as submitted, approve the plan with conditions, or disapprove the plan to provide written notification to the person that submitted an energy usage plan of the determination.  If the energy usage plan is disapproved, the BPU would be required to inform the person that submitted the energy usage plan of the reasons for the disapproval.  The person would have 30 days thereafter to submit a revised energy usage plan to the BPU.  After receiving approval from the BPU, the person would be required to proceed with the implementation of the plan for the proposed AI data center or cryptocurrency mining facility.

The bill would also prohibit any AI data center or cryptocurrency mining facility from connecting to the transmission and distribution system without receiving approval from the BPU for an energy usage plan.

Finally, the bill would require the BPU to monitor all other states within the PJM region to determine if state laws, rules, regulations, or policies of those states require all electricity supplied to an AI data center or cryptocurrency mining facility to be derived from energy sources, such that there is no net decrease in energy supplied to the transmission and distribution system, and to prepare, and update as necessary, a list of states that have implemented such requirements.  When the BPU finds that a majority of the states within the PJM region have implemented the energy supply requirements, the BPU would be required to publish that finding in the New Jersey Register and on the BPU’s Internet website no more than 30 days after making the finding.