Governor Mikie Sherrill announced a comprehensive statewide plan on May 27 to address the growing impact of data centers on energy infrastructure, resource use, and local communities. The announcement positions New Jersey alongside Pennsylvania and other states in the region that are moving to establish formal frameworks governing large-scale data center development.

---

The Four Pillars of the Plan

The Sherrill administration’s plan is organized around four core areas that mirror themes emerging in data center policy discussions across the mid-Atlantic region.

The first pillar addresses energy costs. The plan would require data centers to bring new clean energy online and contribute to the grid infrastructure needed to support their growth, with the stated goal of keeping those costs from being passed to existing ratepayers.

The second pillar focuses on transparency. The plan calls for mandatory reporting on energy and water use, giving the public greater visibility into the resource demands of large-scale facilities.

The third pillar centers on community benefits. The administration intends to develop statewide standards for Community Benefits Agreements and provide state resources to help municipalities negotiate from a position of strength. The goal is to ensure data centers address impacts such as light, noise, and pollution while making meaningful local investments.

The fourth pillar addresses workforce standards, requiring facilities to use local trades and pay prevailing wages on construction and operations.

---

Legislative Activity in Trenton

The Governor’s announcement arrived alongside growing legislative interest in New Jersey data center regulations. Senate Community and Urban Affairs Committee Chairman Troy Singleton announced plans to introduce the Responsible Data Center Development and Resource Protection Act, which he described as a comprehensive statewide framework governing the siting, utility and environmental impacts, water usage, and public accountability of large-scale data centers. Singleton said the legislation is designed to balance economic development and technological innovation against ratepayer protections, water supply safeguards, grid reliability, and community engagement, with the stated aim of creating predictable statewide standards for local governments, utilities, developers, and regulators.

Separately, Senate Bill 680, sponsored by Senators Bob Smith and John McKeon, has been advancing through the committee process. Introduced in January 2026 and referred to the Senate Environment and Energy Committee, the bill was reported out of committee and advanced to the Senate Budget and Appropriations Committee in March. S680 would require all electricity supplied to AI data centers and cryptocurrency mining facilities to be derived from new verifiable Class I renewable energy, newly constructed nuclear power, or a combination of the two. The bill would also require any applicant for local development approval of such a facility to simultaneously submit an energy-use plan to the Board of Public Utilities for review. That plan must detail how the facility will source clean energy, minimize energy use for cooling and ventilation, optimize water sourcing, and utilize heat generated by computing equipment. No facility could connect to the transmission and distribution system without BPU approval of its energy usage plan. Notably, the bill’s clean energy requirements would take effect only after the BPU determines that a majority of PJM states have adopted equivalent requirements.

---

A Broader Wave of Introduced Legislation

Beyond S680 and the Singleton proposal, a range of additional bills has been introduced in the Legislature to address various aspects of New Jersey data center regulations. Taken together, they reflect the breadth of policy concerns legislators are seeking to address. Introduced measures include a proposal to eliminate existing tax credits for data centers while redirecting that revenue toward energy storage tax credits and temporary relief for residential ratepayers; multiple bills requiring data center owners and operators to submit water and energy usage reports to the BPU on either an annual or semi-annual basis; a requirement that the BPU conduct a comprehensive study of the environmental, infrastructural, and financial impacts of data center development in the state; a companion study requirement directed at the Department of Environmental Protection focused specifically on the short and long-term effects of water use by large-scale facilities; a bill establishing expedited approval and permitting procedures for AI data centers powered by small modular nuclear reactors; a prevailing wage requirement for data center construction workers; and a prohibition on non-disclosure agreements intended to conceal information about data center development under the Municipal Land Use Law. We will have a full legislative update covering these and any additional introduced bills in a forthcoming post.

---

Building on Existing Administration Actions

The Sherrill administration framed the data center plan as part of a broader affordability agenda. The announcement cited earlier actions, including executive orders issued on the first day of the administration to freeze rate hikes and expand power generation, approval of six large-scale solar and battery storage projects, a community solar expansion to 3,000 megawatts, accelerated battery storage deployment, and legislation lifting a 50-year moratorium on new nuclear energy development in the state.

---

What Comes Next

The Sherrill plan and the Singleton legislation are still taking shape. The administration has not yet released the full text of proposed regulatory standards, and Singleton’s bill had not been formally introduced as of the Governor’s announcement. S680 remains in the Senate Budget and Appropriations Committee.

---

The Bottom Line for New Jersey

New Jersey is moving toward a more defined regulatory environment for data center development, with the Governor’s office, key legislative leaders, and individual bill sponsors all advancing proposals on parallel tracks. For developers, local officials, and government affairs professionals operating in the state, the contours of New Jersey data center regulations are becoming clearer. However, the full picture will depend on how the administration’s plan is codified and which legislative vehicles ultimately advance.

---