NJ lawmakers advance legislation requiring new AI data centers to use clean energy

Though many New Jersey officials, especially Gov. Phil Murphy, are set on making the Garden State a leader in artificial intelligence development, some advocates and lawmakers have concerns about the energy needed to power that endeavor.
A bill that cleared the state Senate Environment and Energy Committee on Monday afternoon would require AI data centers to source their energy demands with new, clean energy options and submit an energy usage plan to the Board of Public Utilities, or BPU.
The legislation would not take effect until after at least half of the 12 other states in the PJM region — including Pennsylvania, Delaware and Maryland, plus Washington, D.C. — adopt similar requirements. PJM is the largest power grid distributor in North America.
'The point of this bill is to say, 'Yeah, we would love to have AI data centers in New Jersey, but don't put your cost of being here on our ratepayers. You should bring your own electric supply with you,'' said state Sen. Bob Smith, D-Middlesex, who chairs the Environment and Energy Committee.
Nearly an hour of testimony on the bill included arguments from advocates both for and against it.
Taylor McFarland of the Sierra Club thanked the committee leadership for taking up this issue because the 'rapid demand for data centers in New Jersey will lead to a massive energy demand straining the existing grid.'
But Michael Egenton of the New Jersey State Chamber of Commerce said the state should be encouraging new industry sectors to open operations instead of 'placing hurdles, impediments, mandates and fines,' because that will ultimately lead to their opening in other regions.
Earlier: NJ wants to be an artificial intelligence leader. Do we have the energy supply?
Earlier this month, the state Senate Legislative Oversight Committee held a three hour meeting to discuss the needs of the state's energy infrastructure and where AI fit into that.
Panelists from utility companies, distributors and others in the energy and artificial intelligence industries noted that the supply now is not able to meet the demand in New Jersey — which consumes more energy than the state generates — and that gap is expected to grow.
State Sen. Andrew Zwicker, that committee's chair, put the energy usage of data centers into perspective by saying they already use 2% of the energy globally.
"The environmental impact of AI is remarkable," he said. "Training a single large language model like OpenAI's ChatGPT consumes approximately 1,300 megawatt hours of electricity, the same amount used by 130 U.S. homes in a year."
Zwicker went on to say New Jersey's goal should be to "foster AI, not resist it," and to learn what can be done.
Last year, Murphy called for what he dubbed an "AI moonshot" — an effort to advance AI use and opportunities to put New Jersey at the forefront of new economic developments.
Since that announcement, he has touted the state's partnership with Princeton University to create an AI innovation hub, and last summer he signed a law that will set aside tax breaks for businesses that collect more than half their revenue from artificial intelligence or use more than half their staff for that purpose. Businesses would be eligible for incentives worth up to $250 million.
Industry leaders have already taken steps to secure the energy needed to support their operations. Microsoft announced that it had exclusively acquired all of the energy created at the newly reopened Three Mile Island nuclear power plant in Pennsylvania for its data centers.
During Murphy's two terms, or since 2017, five power generation plants have shut down in New Jersey: four coal plants and the Oyster Creek nuclear power plant. In addition, Murphy's plans for offshore wind have fallen apart as the state has ended four solicitations for projects, with Orsted abandoning two projects and most of the bidders on the others walking away, particularly in the wake of President Donald Trump's executive order to freeze the issuance of new offshore wind permits.
One offshore wind project remains in New Jersey: Atlantic Shores South, which has received all its federal approvals and is set to generate 2,800 megawatts as early as 2028.
Natural gas and nuclear energy provided 90% of the state's total energy generation from 2011 to 2023.
Residents are split on how the state produces energy overall, according to a Fairleigh Dickinson University poll released earlier this month.
About a third of respondents each supported nuclear power or natural gas. Offshore wind was also popular when it was suggested to the poll's respondents. Other options, such as importing electricity from other states or not making investments in technology that would require more electricity, were unpopular.
Katie Sobko covers the New Jersey Statehouse. Email: sobko@northjersey.com
This article originally appeared on NorthJersey.com: NJ bill to require AI data centers to use clean energy

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