New Jersey tightens the rules on data centers,
and gives towns a negotiating framework.

New Jersey has added two things to the way data centers get built here. The first is disclosure. Under a law signed this week, owners and operators file reports with the state Board of Public Utilities twice a year covering total energy consumption, how much of it goes to cooling and to the computing equipment itself, peak daily water use, where that water comes from, and what they have for on-site and backup power.

The second is negotiating position. The Department of Community Affairs sent municipalities a statewide framework for community benefits agreements, the deals a town strikes with a developer alongside the approval itself. The framework walks through evaluating the load a project puts on local infrastructure, working out emergency response and infrastructure needs, and putting real investments on the table: public infrastructure work, blight remediation, schools, workforce development programs. It also sets out state labor standards, including prevailing wage and project labor agreement requirements. The Economic Development Authority has opened an online hub for towns that want help, and the Board of Public Utilities and the Department of Environmental Protection have each stood up technical assistance teams.

Both sit on top of legislation from last month that requires data center operators to bring their own clean energy and puts them in a separate utility rate class, so their demand is billed apart from everyone else's. On the same day, the governor signed a law defunding a tax credit program for data centers and artificial intelligence projects that had been created last year with $500 million drawn from the Aspire and Emerge programs. Half of that had already gone to a single project in Kenilworth. The remaining $250 million goes back to the programs it came from.

For a homeowner, the part that matters is not the reporting schedule. It is that a town weighing one of these now has a written framework and a set of numbers to ask for, rather than negotiating from scratch. A growing number of New Jersey municipalities have been looking at banning new facilities outright, which is the position a council tends to land on when it does not feel it has anything else to work with.