New Jersey wants to stop residents’ electricity bills from subsidizing massive data center energy costs powering the AI boom

New Jersey Gov. Mikie Sherrill has announced a statewide strategy to tackle the impact of data centers on energy demand, and hold owners accountable.

“By establishing these guardrails, we will hold data centers accountable, ensure they contribute their fair share, and make sure our communities not only benefit from the AI innovation happening in our state, but have a real hand in shaping it,” Sherrill said in a release.

Unaffordable energy bills

In 2025, electric and gas utilities requested nearly $31 billion in rate increases, which was more than double from 2024’s total of $15 billion, according to research by nonprofit PowerLines.

And U.S. Energy Information Administration data shows that residential rates grew an average of 10.2% in March compared to the year prior.

These increases have put pressure on American families, putting “many people in the impossible situation of deciding whether to pay to keep their lights on or to pay for other essentials like food, medicine and transportation,” according to Consumer Reports.

AI data centers are one reason for the increases, along with rising fuel prices, and the cost to upgrade aging electrical grids, or to make them more resilient in the face of weather events, the publication reported.

New Jersey’s plan is a direct response to this. The governor said that electricity prices in the region saw an increase of roughly 20% last summer alone, according to a report from NBC 4 New York.

NBC 4 reported that environmental groups were backing the governor’s proposed strategy, “warning that data centers could strain water supplies and increase pollution without stronger oversight.”

States that are home to many data centers, such as Texas, Arizona, and Louisiana have faced water issues, as have residents in Georgia living next to a massive Meta data center.