Requires submission of energy usage plan to BPU for proposed artificial intelligence data centers; requires all electricity for artificial intelligence data centers to be derived from new clean energy sources.
This legislation is intended to alleviate the strain that increasing energy demands from AI data centers place on New Jersey's electric grid, as these demands are expected to escalate significantly in the coming years. In light of recent capacity auctions that indicated spiraling energy costs, the bill seeks to provide an environmentally sustainable plan for the operation of data centers. Proponents argue that this approach not only will help in managing energy supply effectively but will also promote the use of clean energy sources to meet growth expectations in the industry.
Assembly Bill A5564, introduced in April 2025, requires that all electricity supplied to artificial intelligence (AI) data centers in New Jersey be derived from new verifiable Class I renewable energy sources or nuclear power. The bill aims to address the rising energy demands of the data center industry, which has seen significant growth and is projected to escalate further. Essentially, if a majority of states in the PJM region adopt similar requirements, this legislation mandates that no AI data center can connect to the state's transmission system without an approved energy usage plan from the Board of Public Utilities (BPU).
Noteworthy points of contention surrounding A5564 include concerns regarding its implications for local development approvals. By requiring a detailed energy usage plan that must be submitted concurrently with applications for local development, opponents may argue that this requirement adds layers of regulatory burden potentially disincentivizing the establishment of new data centers. Moreover, the nuances of energy generation and local versus state regulations may fuel debate regarding the balance of energy governance and the economic impact on local communities. Advocates for local control fear this bill could undercut their ability to tailor regulations to meet specific community needs.