Panel advances bill to shield non-data-center customers from data-center costs
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Summary
S731, amended to extend protections to all large-load customers, was amended and released. Supporters including environmental groups argued data centers are driving significant electricity demand spikes in PJM and the bill would require large users to provide guarantees or otherwise protect other ratepayers.
The Senate Economic Growth Committee amended and released S731, a bill requiring electric public utilities to set special rules for data centers and other large-load customers to prevent cost shifts onto non‑data-center ratepayers.
Jack Ramirez of the New Jersey Business and Industry Association said the amendments improve clarity and protect ratepayers while allowing business growth, and described NJBIA’s position as neutral on the bill in its current form. Environmental and consumer advocates including Luke Pavlov of New Jersey LCV and Alex Ambrose of New Jersey Policy Perspective told the committee data centers increase demand in the PJM capacity auction and drive up costs for ordinary customers.
Ambrose said, "AI data centers accounted for over 70% of the increase in demand in the 2025, 2026 capacity auction at PJM," warning that such demand projections can double- or triple-count requests and push up rates. The bill's amendments expand the scope from data centers to all large-load customers, allow the Board of Public Utilities to require financial guarantees from new large loads, and require tariffs that protect other customers from cost increases.
A motion to amend and release S731 was moved by the Vice Chair and seconded by Chair Cruz Perez; roll call recorded affirmative votes and the committee amended and released the bill.