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A1170
ASSEMBLY, No. 1170
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblyman JOE DANIELSEN
District 17 (Middlesex and Somerset)
SYNOPSIS
���� 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.
CURRENT VERSION OF TEXT
���� Introduced Pending Technical Review by Legislative
Counsel.
��
An Act
concerning artificial intelligence data centers and supplementing
Title 48 of the Revised Statutes.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� The Legislature finds
and declares that data center operation is one of the fastest growing
industries worldwide and in the United States and that as of March 2024, there
are 5,381 data centers located in the United States, 73 of which are located in
New Jersey.
���� The Legislature further finds
and declares that data center load growth has tripled over the past decade and
is projected to double or triple by 2028.
���� The Legislature further finds
and declares that PJM Interconnection (PJM) is the regional transmission
organization that manages the electric grid across 13 states, including New
Jersey; that PJM�s capacity market ensures long-term grid reliability by securing
the appropriate amount of power supply resources required to meet predicted
energy demand; and that PJM utilizes an annual capacity auction to procure
capacity for a given year.
���� The Legislature further finds
and declares that at PJM�s capacity auction in July 2024 capacity prices
increased by $12.5 billion compared to capacity prices from the previous year;
and that the 2025 Basic Generation Service auction for residential and small
commercial customers (BGS-RSCP), certified by the Board of Public Utilities,
saw approximately 35 percent higher prices than in 2023.
���� The Legislature further finds
and declares that in both auctions increased capacity prices were driven by an
expected increase in demand and a stagnant supply of energy in New Jersey and
the rest of the PJM territory.
���� The Legislature further finds
and declares that many states served by PJM, including New Jersey, urged the
Federal Energy Regulatory Commission (FERC) to safeguard ratepayers from
unwarranted prices by modifying PJM�s auction price cap due to growing concerns
about the potential for excessive capacity market price increases in upcoming
capacity auctions, which prompted the FERC to postpone the PJM�s next capacity
auction.
���� The Legislature further finds
and declares that the expansion of data centers has placed strain on the
electric grid and that projections of increased energy demand from data centers
has put an undue burden on New Jersey ratepayers.
���� The Legislature therefore
determines that it is in the public interest of the residents of New Jersey to
require all electricity supplied to a data center within the State to be
derived from new verifiable Class I renewable energy, energy from nuclear power
plants, or a combination thereof.
���� 2.��� As used in this act:
���� �AI data center� means the
same as defined in section 2 of P.L.2024, c.49 (C.34:1B-395).
���� �Application for local
development approval� means the application form and all accompanying documents
required for approval of a subdivision plat, site plan, planned development,
conditional use, zoning variance, or direction of the issuance of a permit
pursuant to the �Municipal Land Use Law,� P.L.1975, c.291 (C.40:55D-1 et seq.)
or R.S.40:27-1 et seq., for any use, development, or construction.
���� �Artificial intelligence� or
�AI� means the same as defined in section 2 of P.L.2024, c.49 (C.34:1B-395).
���� �Board� means the Board of
Public Utilities.
���� �Class I renewable energy�
means the same as defined in section 3 of P.L.1999, c.23 (C.48:3-51).
���� �Nuclear power plant� means
the same as defined in section 2 of P.L.2018, c.16 (C.48:3-87.4).
���� �Person� means the same as
defined in section 3 of P.L.1999, c.23 (C.48:3-51).
���� �PJM Interconnection, L.L.C.�
or �PJM� means the same as the term is defined in section 3 of P.L.1999, c.23
(C.48:3-51).
���� �Transmission and distribution
system� means the same as the term is defined in section 3 of P.L.1999, c.23
(C.48:3-51).
���� 3.��� a.� Upon a finding by
the board pursuant to subsection b. of section 4 of this act, and published in
the New Jersey Register and on the board�s internet website, all electricity
supplied to an AI data center within the State shall be derived from new verifiable
Class I renewable energy, energy from nuclear power plants, or a combination
thereof, such that there is no net decrease of verifiable Class I renewable
energy and energy from nuclear power plants supplied to the transmission and
distribution system.
���� b.��� Upon a finding by the
board pursuant to subsection b. of section 4 of this act, and published in the
New Jersey Register and on the board�s internet website, any person submitting
an application for local development approval for the establishment of an AI
data center within the State shall simultaneously prepare and submit an energy
usage plan to the board for approval.� The energy usage plan shall include, at
a minimum, procedures that the AI data center will utilize to:
���� (1)� derive all electricity
from new verifiable Class I renewable energy, energy from nuclear power plants,
or a combination thereof, as required pursuant to subsection a. of this
section;
���� (2)� minimize the amount of
energy that is used to cool computers by optimizing the layout of the room,
ventilation, and cooling systems;
���� (3)� optimize water usage,
including the process the AI data center will use to source water in a manner
that has the least negative impacts to the environment and to drinking water;
���� (4)� ensure that ventilation
and weatherproofing of the building is optimized to minimize energy usage; and
���� (5)� utilize the heat
generated by the computers in the AI data center for water or space heating in
the AI data center or adjacent buildings.
���� c.���� No later than 90 days
after receipt of an energy usage plan, the board shall make a determination to
approve the plan as submitted, approve the plan with conditions, or disapprove
the plan and shall provide written notification to the person that submitted an
energy usage plan of the determination.� If the energy usage plan is
disapproved, the board shall inform the person that submitted the energy usage
plan of the reasons for the disapproval.� The person shall have 30 days
thereafter to submit a revised energy usage plan to the board.� After receiving
approval from the board, the individual or business shall proceed with the
implementation of the plan for the proposed AI data center.
���� d.��� No AI data center shall
connect to the transmission and distribution system without receiving approval
from the board for an energy usage plan submitted pursuant to subsection b. of
this section.
���� 4.��� a.� The board shall
monitor all other states within the PJM region to determine if any state laws,
rules, regulations, or policies of those states require all electricity
supplied to an AI data center to be derived from energy sources, such that
there is no net decrease in energy supplied to the transmission and
distribution system, and prepare, and update as necessary, a list of states
that have implemented such requirements.
���� b.��� When the board finds
that a majority of the states within the PJM region have implemented the energy
supply requirements articulated in subsection a. of this section, the board
shall publish that finding in the New Jersey Register and on the board�s Internet
website no more than 30 days after making the finding.
���� 5.��� This act shall take
effect immediately.
STATEMENT
���� This bill would require all
electricity for artificial intelligence (AI) data centers to be derived from
new verifiable Class I renewable energy, energy from nuclear power plants, or a
combination thereof, such that there is no net decrease of verifiable Class I
renewable energy and energy from nuclear power plants supplied to the
transmission and distribution system if the Board of Public Utilities (board)
finds that a majority of the states in the PJM region require all electricity
supplied to an AI data center to be derived from energy sources, such that
there is no net decrease in energy supplied to the transmission and
distribution system.
���� In addition, the bill would
require any person submitting an application for local development approval for
the establishment of an AI data center within the State to simultaneously
prepare and submit an energy usage plan to the board for approval if the board
finds that a majority of the states in the PJM region require all electricity
supplied to an AI data center to be derived from energy sources, such that
there is no net decrease in energy supplied to the transmission and
distribution system.� The energy usage plan would be required to include, at a
minimum, procedures that the AI data center will utilize to:
���� (1)� derive all electricity
from new verifiable Class I renewable energy, energy from nuclear power plants,
or a combination thereof;
���� (2)� minimize the amount of
energy that is used to cool computers by optimizing the layout of the room,
ventilation, and cooling systems;
���� (3)� optimize water usage,
including the process the AI data center plans to use to source water in a
manner that has the least negative impacts to the environment and to drinking
water;
���� (4)� ensure that ventilation
and weatherproofing of the building is optimized to minimize energy usage; and
���� (5)� utilize the heat
generated by the computers in the AI data center for water or space heating in
the AI data center or adjacent buildings.
���� No later than 90 days after
receipt of an energy usage plan, the board would be required to make a
determination to approve the plan as submitted, approve the plan with
conditions, or disapprove the plan and to provide written notification to the
person that submitted an energy usage plan of the determination.� If the energy
usage plan is disapproved, the board would be required to inform the person
that submitted the energy usage plan of the reasons for the disapproval.� The person
would have 30 days thereafter to submit a revised energy usage plan to the board.�
After receiving approval from the board, the person would be required to
proceed with the implementation of the plan for the proposed AI data center.
���� The bill would also prohibit
any AI data center from connecting to the transmission and distribution system
without receiving approval from the board for an energy usage plan.
���� Finally, the bill would
require the board to monitor all other states within the PJM region to
determine if state laws, rules, regulations, or policies of those states
require all electricity supplied to an AI data center to be derived from energy
sources, such that there is no net decrease in energy supplied to the
transmission and distribution system, and to prepare, and update as necessary,
a list of states that have implemented such requirements.� When the board finds
that a majority of the states within the PJM region have implemented the energy
supply requirements, the board would be required to publish that finding in the
New Jersey Register and on the board�s Internet website no more than 30 days
after making the finding.