Data Centers Blamed for Rising NJ Electric Bills

A progressive think tank says data centers' electricity demands are driving up utility costs for residents and small businesses.

Mar. 31, 2026 at 5:12pm

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An abstract geometric illustration composed of overlapping triangles and rectangles in shades of blue, red, and yellow, conceptually representing the complex interplay of data centers, electricity demands, and consumer utility bills.As data centers consume an ever-growing share of New Jersey's electricity, the state must find ways to ensure the costs don't fall unfairly on residential and small business ratepayers.Vineland Today

According to a new report by the Trenton-based think tank New Jersey Policy Perspective, data centers are consuming an increasing amount of electricity in New Jersey, accounting for nearly 70% of the rise in demand on the regional electric grid. This has led to higher wholesale electricity prices, resulting in a 20% jump in New Jersey electric bills in 2025. The report calls for the state to implement policies that would require large data centers to pay their own way and not pass on costs to other ratepayers.

Why it matters

As data centers continue to proliferate across New Jersey to support the growth of artificial intelligence and other data-intensive technologies, there are growing concerns about the impact on local communities and infrastructure. This report highlights how the energy demands of these facilities are directly contributing to higher electricity bills for residents and small businesses, raising questions about how to balance economic development with consumer protections.

The details

The report from New Jersey Policy Perspective found that by 2030, data centers will consume nearly 10% of the state's electrical usage, the equivalent of the entire state of Rhode Island. Legislation is currently moving through the state capital that aims to force large data centers using over 100 megawatts of electricity to pay their own way and not pass on costs to other ratepayers. The report argues there are currently no mechanisms in place to protect everyday consumers from higher electricity rates due to data center buildout.

  • In 2024, large AI data centers across the U.S. consumed about 14 billion gallons of water, an amount that could double by 2028.
  • In 2025, New Jersey electric bills rose by 20% due to the higher wholesale electricity prices driven by data centers' electricity demands.

The players

New Jersey Policy Perspective

A progressive Trenton-based think tank that released a report on the impact of data centers on New Jersey's electricity rates.

Mike Renna

President and chief executive officer of South Jersey Industries, who said it is critical for New Jersey's long-term competitiveness to attract data centers.

Kim C. Hanemann

President and chief operating officer of PSE&G, who said New Jersey should "get the rules right" to attract and retain data centers in the state.

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What they’re saying

“Electricity rates are set by the utility providers in New Jersey and approved by the Board of Public Utilities. Yet there are currently no mechanisms in place to protect everyday ratepayers, such as families and small businesses, from higher costs due to data center buildout.”

— New Jersey Policy Perspective

“It's critical for New Jersey for our long-term competitiveness to be a player" to attract data centers. "It will take us a long time to recover if we are on the sidelines.”

— Mike Renna, President and chief executive officer of South Jersey Industries

“We shouldn't be losing the economic opportunity. I think we should get the rules right to attract and retain them in our state.”

— Kim C. Hanemann, President and chief operating officer of PSE&G

What’s next

Legislation moving through New Jersey's capital aims to force large facilities that use more than 100 megawatts of electricity to pay their own way and to keep other ratepayers, including residential customers, from subsidizing data centers' power.

The takeaway

This report highlights the growing tension between the economic benefits of data centers and their impact on local communities and consumers. As New Jersey seeks to position itself as a hub for data-driven industries, policymakers will need to carefully balance supporting this growth with protecting ratepayers from bearing the brunt of the energy demands.