Southampton, NJ – While the New Jersey legislature tiptoes into regulating data centers and New Jersey Governor Sherrill does little to protect ratepayers and the environment with her “comprehensive plan,” the New York State Legislature showed true leadership on June 6 by passing bipartisan legislation that would place a one-year moratorium on permits for data centers. If New York Governor Kathy Hochul signs the legislation, it would be the first statewide moratorium in the nation.
Called the “Responsible Data Center Development Act,” the New York legislation would also require a local public hearing before data centers are constructed, as well as a statewide environmental impact report on data centers within 18 months. The moratorium would apply to any data center that uses more than 20 megawatts.
New Jersey residents strongly support such a moratorium. A poll by Fairleigh Dickinson University found that 65 percent of voters favor a ban on the construction of new data centers in New Jersey until more power plants can be built and a poll by Stockton University found that 56 percent of voters would support a ban on data centers in the town where they live.
“New Jersey is on a runaway train when it comes to data centers - traveling throughout the state looking for places to crash. If guardrails and brakes are not applied now, they will cause extensive havoc in our communities, environment, water supplies, health, economy, jobs and utility rates,” stated Amy Goldsmith, NJ State Director Clean Water Action. “Let’s do what New York is doing –adopt a data center moratorium. Governor Sherrill has a responsibility to protect Garden State residents from harm. Her earlier announcement does not establish the right signal switches at the right decision-making intersections, put us all at risk.”
“The governor’s so-called ‘comprehensive plan’ is more like a concept of a plan, which was not even memorialized in an executive order, has no timeframe for implementation, and does not take the immediate action needed to protect New Jersey ratepayers from rising rates or to provide needed environmental protections,” said John Reichman, EmpowerNJ steering committee member.
“Credit to the New York legislature for taking the only responsible path when it comes to out-of-control data center development: a complete pause on new construction, so local and state leaders can take the time needed to properly assess the many inherent harms and hazards this industry brings. Here in New Jersey, plans for dealing with this emerging crisis have been half-hearted and inadequate. We must follow New York’s lead and pass a true moratorium on all new data center construction – now,” said Matt Smith, New Jersey state director at Food & Water Watch.
New Jersey, on the other hand, is considering bills that won’t help our residents or our environment nearly as much. Legislation that seems most likely to reach the governor’s desk would require data center owners and operators to submit semi-annual water and energy usage reports to the Board of Public Utilities, and would place a tariff on data centers of at least 50 megawatts and add protections for ratepayers.
Tax credits for artificial-intelligence industries offered by former Governor Phil Murphy through the New Jersey Economic Development Authority (NJEDA) helped data centers proliferate though New Jersey, and current policymakers are working to redirect those incentives toward energy-saving projects and residential benefits. Senators Joe Cryan and Assembly Members Andrew Macurdy, Balvir Singh, and Annette Quijano introduced the "End Data Center Tax Credits Act" on June 1 that would reallocate $250 million in tax credits originally designated for the artificial intelligence industry and large-scale data centers to energy-storage projects and to a one-time income tax credit to lower-income taxpayers who are residential electric customers.
Soon after this legislation was introduced, NJEDA announced that it was temporarily pausing the acceptance of new applications from AI industries for tax credits “while it conducts a review” of the Next New Jersey program, which provides the tax benefits. During this period, no new applications will be accepted.
"Municipalities are raising their voices by banning data centers until good regulations are in place. This is happening because we don’t have leadership taking the critical steps necessary to protect its residents. A truly comprehensive plan would address water withdrawals, water pollution, noise, real ‘bring your own’ energy requirements, plus more. Pinelands Alliance applauds towns for protecting the environment and their communities,” said Jaclyn Rhoads, Executive Director at Pinelands Alliance.
But we still need to do more. The Pinelands Alliance, EmpowerNJ, Food & Water Watch, Clean Water Action, and over 60 of our allied organizations wrote to Governor Sherrill on May 13, asking for a three-year moratorium on data center development. More importantly, over 8,700 people have signed our petition calling on the governor to impose this three-year halt. The vast majority of New Jersey’s agree that our state needs a pause in the construction of data centers.
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Since our founding during the campaign to pass the landmark Clean Water Act in 1972, Clean Water Action has worked to win strong health and environmental protections by bringing issue expertise, solution-oriented thinking and people power to the table. Learn more at www.cleanwater.org/nj.