Proposed NJ Bill to Require AI Data Centers to Report Water + Energy Usage

In recent years, New Jersey has been at the forefront of many booming industries, including artificial intelligence. While it may come as a surprise, New Jersey has evolved into its own hub for tech infrastructure. Recent headlines have reported data centers built to meet the demands of AI usage popping up around the Garden State, the most recent headline is about a bill proposed to require data centers to report their water and energy usage to the New Jersey Board of Public Utilities. Read on for more information about the bill and what it would mean for New Jersey.

What are Data Centers?

Data centers are essentially massive warehouses storing computers that house data and process requests to keep online platforms running. Data centers are involved in various aspects of daily internet use, including video streaming, online shopping, and of course, generative AI usage. Data centers have been existed for years to support basic internet and tech, but are proliferating in areas like New Jersey, Northern Virginia, and Texas as high-energy demands related to generative AI technologies increase, per NPR. NJ Biz previously reported in April that New Jersey ranked fourth in the country as the state leading in data center sales.

Major tech companies, corporations, and internet providers utilize the centers to ensure the smooth processing of the high-energy requests. One common use for the centers is “cloud” storage and transferring data between devices. Another is generative AI usage and training AI models. The speed and energy used in generative AI chats are possible due to data centers with the advanced infrastructure required to accommodate the request.

The kinds of infrastructure a data center may use for these requests vary, but all aim to keep servers cool and prevent overheating from high traffic. This functions as an additional layer of energy demand on top of the computers’ essential operations, with different types of cooling systems with varying energy costs. Data centers have been criticized for excessive water usage, as a consequence of liquid cooling technologies used to cool servers. Data center water use has led to reports of water source issues and rising energy bills in areas near the centers, in addition to long-term climate impact concerns.

New Legislation

In March of 2025, the New Jersey State Legislature introduced a bill, S4293, to require the data centers to report their water and energy usage to the Board of Public Utilities. The bill is intended to enforce transparency and would not impose any restrictions on the amount of energy or water a center can use, but would require the owner or operators of any data center in the state to annually report the buildings’ electricity usage, water usage, and water source. The bill would further require the centers to report “sustainability indicators,” including whether the heat generated by the servers was repurposed in any way, the temperature of the heat generated, and whether energy was derived from renewable sources.

The bill was amended in May of 2025 after being referred to the Senate Environment and Energy Committee, and was passed by both the State Senate and State Assembly on June 30th, 2025. The bill was brought to Governor Phil Murphy to be signed into law on October 20th, and was conditionally vetoed. Per New Jersey Monitor, Governor Murphy asked lawmakers to add provisions for state regulators to “weigh whether those data centers’ power and cooling demands are unduly burdening other ratepayers.” The conditional veto requesting the additional measures would extend the deadline for data centers to start reporting their energy and water usage to 2027.

See More: New Program Will Track Progress of SAFE Kits in New Jersey

Data Centers in The Garden State

In New Jersey, there are already 82 existing data centers, according to Data Center Map. HG recently reported on a data center project in Secaucus, built by CoreSite. CoreSite’s NY3 data center, its second in Secaucus, was built to meet the demands of high-speed internet usage, with Open Cloud Exchange being a major purpose of the center. Open Cloud Exchange allows users to interconnect cloud platforms, including Amazon, Google, and Microsoft, without needing to move their data from one platform to the other, which CoreSite says cuts down on costs and time. Other NJ data centers include Iron Mountain in Edison and NJFX in Wall Township.

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