Sherrill proposes ‘guardrails’ for data centers

Gov. Mikie Sherrill on Wednesday announced a four-step “guardrails” plan to handle the increasing energy demand from data centers on New Jersey’s grid, and she said work with the Legislature on those goals is underway. 

The four-pillar plan proposes that data center developers must “pay their own way” and bring energy to the grid with them; be transparent and report energy and water use; engage with communities on concerns involving noise and light pollution; and build facilities with union labor and strong wages.

The proliferation of data centers has become a major political issue across the country, with many voters believing the centers are to blame for an increase in energy prices.

“For years, smaller data centers have been scattered in office parks across our state, each needing maybe a megawatt of energy to operate, and they connect to the grid to get it,” Sherrill said. “But today’s data centers sometimes use 300 megawatts, enough to power entire towns. That skyrocketing demand is outpacing supply and jacking up all of our electric bills. Not on my watch, not on your backs.”

Polls of New Jersey voters have found skepticism of the facilities. One poll found a majority don’t want data centers in their towns, and another found a majority want a moratorium on the construction of new data centers. 

New Jersey politicians have responded in kind. A trio of state legislators said they will introduce a bill cutting potential tax incentives for data centers. And several candidates for office this year have made their opposition to data centers a central plank of their candidacies. 

New Jersey Business & Industry Association President and CEO Michele Siekerka said the plan signals that the growing industry is welcome in New Jersey. She said the NJBIA hopes to release a report highlighting “opportunities and potential challenges.”

“Like all development, opportunities and challenges are presented, and getting the right balance to move projects forward is significant,” Siekerka said. “The Governor’s parameters and expectancy of transparency are some first steps in establishing a process to get the ball rolling.”

Jackson Morris, director of the State Power Sector at the Natural Resources Defense Council, a major environmental nonprofit, praised the guardrails and said legislation to enforce them must go forward.

“The governor and legislature now need to adopt the necessary laws and regulations to ensure that whenever data centers are built, they pay their fair share, invest in new clean energy and more responsibly use the state’s water resources, create good family-sustaining jobs, and protect communities,” Morris said. “Doing so would make New Jersey a national leader on this front.”

State Sen. John Burzichelli (D-Paulsboro) was one of several legislators to join Sherrill on Wednesday, and he said a mindful approach is needed as the state still needs data centers in some form to continue moving forward.

“If we don’t adapt, we have to make a choice,” he said. “We’re either going to become an Amish community and not be part of this technology — we can’t do that — or we’re going to get it right.”