Comprehensive Plan for NJ Data Centers Announced

By Anthony Birritteri, Editor-in-Chief On May 27, 2026

In a move that welcomes data center development while establishing safeguards to protect New Jersey residents from paying for the power these centers consume, among other related issues, Gov. Mikie Sherrill today announced a four-prong plan that she calls the first comprehensive strategy in the nation to address a growing industry that is driving innovation and the economy.

The first step entails the Sherrill administration working with the Legislature to establish rules to protect ratepayers, with data centers “paying their own way” regarding the energy they use. “We’re going to require them to bring their energy to the grid, contract with their own power generators and pay for the grid upgrades needed to handle their larger loads. Instead of asking New Jerseyans to subsidize big tech, we’re asking big tech to improve our grid, making it more efficient and reliable, and lowering costs for everyone,” Sherril said.

The second step involves data center transparency. “People deserve to know what’s being built in their communities and what shared resources are being used today,” Sherrill said. “The public has no clue how much energy or water any of these data centers need. I want to mandate transparency and require that data centers report energy and water use to the public every six months. The Legislature has been hard at work on bills to address these first two measures.”

The third step entails making sure data centers engage with – and invest back into – the communities in which they are located. “For a long time, it was understood that if a business wants to thrive in a community, it has to give back to that community,” the governor said. “So, we’re developing strong statewide guidelines for community benefit agreements for the industry. This will require data centers to address issues like noise, light, and pollution, [while] investing in towns.”

The fourth and final step is to make sure the jobs data centers create in construction and long-term operations are good paying jobs that one can raise a family on, Sherrill said, adding, “If you’re going to build a data center here, you should be using union labor and paying prevailing wages.”

There are a lot of businesses that want to invest in New Jersey right now, Sherril told New Jersey Business Magazine, and the new plan is the most comprehensive in the nation in moving forward on data center development. “I think this kind of stability and the legislation that will be passed, is going to show we have a united government that wants to move forward with clear rules of the road. I think that’s what businesses want. There are a lot of places with no rules, where things could get upended very quickly. … Not here in New Jersey, we’re providing the kind of stability businesses are looking for.”

Michele Siekerka, president and CEO of the New Jersey Business & Industry Association, said NJBIA appreciates the Sherrill administration proactively addressing the opportunity for data center development in New Jersey. “Like all development, opportunities and challenges are presented, and getting the right balance to move projects forward is significant. The governor’s parameters and expectancy of transparency are some first steps in establishing a process to get the ball rolling. Details on how these parameters are more deeply defined are yet to come.”

Siekerka added that NJBIA has been studying the opportunities and potential challenges that data centers can bring to New Jersey as part of a future report, which will be shared in the near future.

Among the speakers at this morning’s press conference, Mount Arlington Mayor Michael Stanzilis was blunt in saying that if New Jersey and the US do not build the infrastructure necessary to support artificial intelligence and advanced computing, another state or country will. “With that, the investment goes out the window, with it; the jobs, the innovation and the long-term economic leadership that will define the next generation’s economy,” he said.

At the same time, Stanzilis said communities and mayors across the entire state also have the right to ask the tough questions about community impact, energy demand, noise, water usage, etc.

Overall, he said the data center issue should not be framed as a choice between protecting communities and the economy. “This is not an ‘us versus them’ question,” he said. “We can have it both ways.”

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