New Jersey Governor Signs Law Requiring Data Centers to Disclose Energy and Water Usage

New Jersey Governor Mikie Sherrill has signed into law new rules requiring data center owners and operators in the state to disclose their energy and water consumption to regulators, marking the latest step in a broader effort to manage the rapid growth of the digital infrastructure sector.

The legislation mandates that data centers submit semiannual reports to the New Jersey Board of Public Utilities detailing total energy consumption, energy used for cooling versus IT equipment, peak daily water use, water sources, and on-site and backup power supplies. The requirements apply to both existing and new facilities with a capacity exceeding 100MW.

The new disclosure rules follow legislation signed by the governor in July that required data center firms to bring their own clean energy and established a new utility rate class for large-load data centers, aimed at mitigating cost shifting to regular ratepayers. Together, the measures form what Sherrill described as the most comprehensive data center plan in the nation.

"At the beginning of this summer, I announced the most comprehensive data center plan in the nation to establish strong guardrails and hold data centers accountable," said Sherrill. "Just three months later, I am delivering on all four pillars of that plan."

Environmental groups, however, argue the new laws do not go far enough. Several organizations have called for a statewide moratorium on new data center construction, following the lead of neighboring New York, which last month became the first state to impose a statewide moratorium on such developments.

"Data center reporting for energy and water use after the damage is done is the antithesis of guardrails," said Jaclyn Rhoads, executive director of the Pinelands Alliance. "New Jersey is paving the way for data centers to contaminate our air and waterways while leaving the public to suffer. We demand more of our government officials. Pass a moratorium now."

Sherrill pushed back against those arguments, insisting that companies seeking to build data centers in New Jersey will "play by our rules."

"We don't have to choose between innovation and accountability, and we won't," she said.

In addition to the disclosure requirements, Sherrill also signed legislation that ends the $500 million tax credit program previously used to encourage data center development in the state. According to Data Center Map, New Jersey currently hosts 66 data centers operated by 48 companies, with the market dominated by colocation providers including Equinix, QTS, Digital Realty, and Iron Mountain.

The new rules reflect a growing trend among state governments to impose stricter oversight on data centers as power and water demands from AI-driven workloads continue to escalate. Industry observers note that New Jersey's approach—requiring transparency while maintaining incentives for development—could serve as a model for other states grappling with similar challenges.