NJ Governor Sherrill Says AI Data Centers Should ‘Pay Their Own Way’ on Power Costs

Artificial intelligence may be powering the next technological revolution, but New Jersey Governor Mikie Sherrill says residents should not be the ones footing the bill.

Governor Sherrill has unveiled a proposal aimed at addressing the growing impact of AI-driven data centers on New Jersey’s electric grid and utility costs. The plan comes as concerns mount nationwide over the rapid expansion of facilities that support artificial intelligence, cloud computing, and other digital services. Speaking in Trenton, Sherrill argued that modern data centers consume far more electricity than previous generations of computing infrastructure. Some facilities can use as much as 300 megawatts of power—enough to supply entire towns—creating new pressures on energy systems already struggling with rising demand.

The issue has become increasingly important in New Jersey, where residents have faced growing utility costs. Sherrill declared a state of emergency over electricity affordability when she took office and has made lowering energy bills a central priority of her administration.

Making Data Centers Cover Their Costs

At the center of the governor’s proposal is a requirement that new data centers “pay their own way.” Rather than relying on existing infrastructure funded by ratepayers, operators would be required to contract with their own power generators and pay for grid upgrades needed to handle increased electricity demand.

Sherrill argues that the approach would prevent households from subsidizing large technology companies while helping improve grid reliability. Her administration says the goal is to ensure that economic development linked to artificial intelligence does not come at the expense of consumers already dealing with higher utility bills.

The proposal also includes new transparency requirements. Data center operators would be required to publicly report their energy and water consumption every six months, providing residents with greater visibility into how much electricity and other resources these facilities use. State officials say that information is currently difficult for the public to access.

Public Concerns Extend Beyond Electricity Bills

The governor’s announcement follows growing pressure from environmental, labor, and community organizations that have called for stronger oversight of data center development. In May, dozens of groups urged the administration to impose a moratorium on approving new large-scale facilities until additional safeguards could be established.

Their concerns extend beyond electricity demand. The coalition argues that large data centers can consume significant amounts of water, contribute to pollution, strain local infrastructure, and complicate efforts to meet New Jersey’s climate goals. The groups also pointed to data showing that a single 20-megawatt facility can consume as much electricity as all the homes in some New Jersey communities.

Public opinion appears to be moving in a similar direction. A Fairleigh Dickinson University poll found that 65% of New Jersey voters support banning new data centers until additional power generation capacity is built. Support crossed party lines, with majorities of both Democrats and Republicans backing the idea. The same survey found voters broadly favor an “all of the above” energy strategy that includes natural gas, renewable energy, and nuclear power expansion to address rising costs.

New Jersey Joins a Growing National Conversation

Sherrill’s plan goes beyond energy requirements. It also calls for community benefit agreements that would require data centers to address concerns such as noise, light pollution, and local infrastructure impacts while investing in surrounding communities. The governor additionally wants facilities to create well-paying jobs during both construction and long-term operations.

The debate unfolding in New Jersey mirrors a broader national trend. According to the National Conference of State Legislatures, lawmakers in at least 14 states have considered or proposed moratoriums or restrictions on new data center development as communities weigh economic opportunities against environmental and infrastructure concerns.

For now, Sherrill is stopping short of calling for a statewide moratorium. Instead, her administration is betting that stricter oversight, transparency requirements, and cost-sharing measures can balance AI innovation with consumer protection. As demand for artificial intelligence continues to accelerate, New Jersey’s approach could become an early test of how states manage one of the technology sector’s fastest-growing sources of energy consumption.