Legislative Democrats are continuing their efforts to address the state’s rising energy prices, clearing slates of bills in committee that they say would bolster energy production, require energy-intensive data centers to foot the bill, or hold the region’s grid operator accountable.
Spikes in utility costs were a tenet of last year’s statewide campaigns, and Democrats are continuing their all-of-the-above approach to stifling the increases. One bill, S680, would require artificial intelligence data centers and cryptocurrency mining facilities to pull their electricity from renewable energy or nuclear power plants, which proponents say would help lessen the burden on New Jerseyans and support the state’s sustainability goals.
“These data centers must avoid pushing the state’s already stretched energy grid to the brink, which would drive up costs for consumers, businesses, and families,” state Sen. Bob Smith (D-Piscataway) said in a release. “By ensuring these facilities have a clear energy usage plan and are prioritizing clean energy, we can prevent rising costs for consumers while achieving our clean energy goals.”
If passed, the bill would only take effect if a majority of states on the regional power grid implement similar provisions. The Senate Environment and Energy Committee cleared the bill on Monday. Conflicts over data centers are reshaping the state’s local and federal politics.
“There’s a huge discussion nationally about who should be paying for the improvements to the grid in order to get the additional electricity into the grid,” Smith, the committee chair, said during the hearing. “For AI, right now, we’re on the hook. We, the rate payers of New Jersey, are on the hook.”
Ray Cantor, a deputy chief government affairs officer at the New Jersey Business & Industry Association, said his organization acknowledges New Jersey faces a challenge with rising demand and dwindling supply. He requested amendments, however, including a concern that sustainable energy isn’t currently ready to support the massive energy demands of such data centers.
“The major concern, however, we have with this legislation is its emphasis on clean energy, on renewables,” Cantor said. “Data centers need to run 24/7, 365. You cannot do that with renewables alone. Maybe at some point in time, nuclear power comes to play, and that may be a source where you could do that, but for right now, that cannot be done as a practical matter.”
PJM Interconnection, once a little-known group, has faced ire from Democrats who accuse it of failing to keep up with energy demand. PJM operates the energy grids of New Jersey and a dozen other states in the region. Former Gov. Phil Murphy signed legislation addressing PJM last year, and governors from nearby states — both Democrat and Republican — have offered their own critiques.
Last week, the Assembly Telecommunications and Utilities Committee cleared legislation that, among other things, would require New Jersey’s Board of Public Utilities to work with other states to explore leaving PJM.
“From failing to connect new energy generation to presiding over massive spikes in capacity costs, [PJM’s] actions are detrimental to New Jersey residents,” Assemblyman Robert Karabinchak (D-Edison), the bill’s sponsor, said in a release. “New Jerseyans deserve better. They deserve to know if better systems are possible, systems that work in their best interest and are not harmful to families and businesses across the state and throughout the region.”
During last year’s gubernatorial campaign, then-Rep. Mikie Sherrill did not rule out the option of leaving PJM. More precisely, Sherrill said she would direct her attorney general to sue PJM “to force them to end their mismanagement.” Critics like Karabinchak say PJM has failed to efficiently implement renewable energy projects across the grid, partly causing the increase in prices.
“It’s affecting every single person in this state and in other states, so this allows us to be able to discuss these issues,” Karabinchak said. “This is not blaming PJM completely, but we want them at the table.”
Jeff Shields, a PJM spokesperson, said the grid operator is looking forward to working with the Sherrill administration to bring new power to the state.
“PJM aims to be a partner in solving the supply/demand challenge that is creating electric affordability challenges for New Jersey’s consumers,” the spokesperson said. “New Jersey is importing roughly 35% of its power, exacerbating the supply/demand imbalance in the region that directly leads to the affordability challenge for New Jerseyans. PJM’s process to connect new resources to the grid is working and has approved hundreds of projects to get built across the region.”
Assemblyman Greg Myhre (R-Stafford) expressed his own skepticism toward Karabinchak’s legislation before voting no.
“I appreciate the intent of the bill, but I see this as more of a supply issue than how PJM is operating, as they have for 99 years,” he said. “Most people have never heard of PJM until the last year.”
Another bill — this one sponsored by Senate President Nicholas Scutari and Senate Budget Committee Chair Paul Sarlo (D-Wood-Ridge) — would ease the permit process for nuclear facilities. Senate and Assembly committees have moved the bill forward.
“Nuclear power remains one of the most reliable sources of zero-emission electricity available today,” said Assemblyman Wayne DeAngelo (D-Hamilton), another of the bill’s sponsors. “This bill would remove an outdated barrier that has for too long prevented New Jersey from making meaningful progress towards our energy goals, opening the door to technologies that could help strengthen reliability while maintaining the strong safety and environmental standards New Jersey residents expect.”