New Jersey passed a bill requiring data centers to report energy and water use quarterly. The governor sent it back. What it would do and why it matters.
In 2025, New Jersey lawmakers passed a bill that would have required data centers to publicly report how much electricity and water they use. It would have made New Jersey one of the first states to demand that level of transparency from one of the fastest-growing industries in the country.
Governor Phil Murphy didn't sign it as written. He issued a conditional veto in October 2025, sending it back to the Legislature, and a new version was introduced in 2026.
Here is what the bill would require, why it's contested, and why data center transparency matters for everyone's power bills.
What Would New Jersey's Data Center Bill Require?
The bill, S4293, would require data center owners and operators in New Jersey to report their water and energy use to the Board of Public Utilities every quarter, and the board would publish the information online, according to the bill text.
The key provisions:
- ●Who reports. Owners or operators of data centers in the state.
- ●How often. Quarterly, changed from the originally proposed annual schedule.
- ●What's reported. Energy and water use, efficiency metrics such as power usage effectiveness and water usage effectiveness, and renewable energy use.
- ●Public access. The BPU would publish the data on its website within 30 days.
- ●Advance notice. Operators would notify the BPU at least 60 days before significant operational changes.
What Happened to the Bill?
Governor Murphy issued a conditional veto of S4293 on October 20, 2025, returning it to the Senate with requested changes, and it did not become law, according to LegiScan.
A conditional veto doesn't kill a bill outright. It sends it back to the Legislature with changes the governor wants before he'll sign it.
The idea hasn't gone away. A new bill with the same purpose, A4696, was introduced in the Assembly in March 2026 and referred to the Telecommunications and Utilities Committee.
Why Do Supporters Want Data Center Transparency?
Supporters argue that data centers use so much electricity and water that the public and regulators need reliable data to plan for them.
State Sen. Bob Smith described large data centers as "monsters" that "can use 3 million gallons of water just for cooling every day," according to NJ 101.5. Doug O'Malley of Environment New Jersey warned that a single facility could suddenly add millions of gallons of demand to a community's water supply.
Energy is the bigger issue for bills. Data centers used about 4.4% of U.S. electricity in 2023, and that share could triple by 2028, according to research cited by Forbes. We've covered how commercial electricity use, driven by data centers, is on track to pass residential.
You can't plan for demand you can't see.
Why Do Business Groups Oppose It?
The New Jersey Business & Industry Association argued the bill would discourage data center investment and duplicate reporting that already exists.
NJBIA's Ray Cantor said the legislation "sends the wrong message to our business community and unintentionally vilifies data centers," according to NJ 101.5. The group asked Murphy to veto the bill, arguing that existing environmental and utility rules already track the relevant data.
That's the core tension. States want the economic benefits of data centers, but they also need to manage their impact on the grid, water supplies, and customer bills.
How Does This Connect to New Jersey's Power Bills?
New Jersey bills rose sharply in 2025, and lawmakers want to know how much of the pressure comes from large-scale computing.
PJM capacity costs, driven partly by data center demand across the region, sent New Jersey electric bills soaring. Understanding where demand is coming from helps regulators decide who should pay for new generation and grid upgrades.
New Jersey has also studied the issue from another angle. In July 2025, Murphy signed a law directing the BPU to study data centers' impact on electricity costs.
What Are Other States Doing About Data Centers?
States are testing a range of approaches, from transparency rules to requiring data centers to pay their own infrastructure costs.
Examples:
- ●New Jersey. A separate bill would require new data centers to bring their own clean power.
- ●Tennessee. A new law requires large data centers to pay full electricity and infrastructure costs.
- ●Utah. A proposed hyperscale project has raised questions about power and water risk.
Transparency alone won't solve these challenges. But it gives policymakers, utilities, and communities the data they need to plan.
Why Does Data Center Transparency Matter for Solar Owners?
Better data on large loads helps grid planners and regulators decide how to meet demand, and that shapes the prices and programs that affect solar owners.
When data center demand is hidden, it's harder to plan new supply, and costs can land on everyone else. Clear data supports fairer cost allocation and smarter planning.
For solar owners, rising demand also means every kilowatt-hour a working system produces is more valuable. Many commercial systems installed in the 2010s are losing output to aging equipment, and repowering an aging PV system can restore it.
Start With a Ballpark Estimate
As data center demand grows, working solar gets more valuable. Find out what your existing solar project may be worth before deciding whether to repair, repower, or sell.
Sources: NJ Spotlight News, "How much water and energy do data centers consume? NJ bill demands answers"; LegiScan, NJ S4293; LegiScan, NJ A4696; NJ 101.5, "New Jersey's AI data centers face new water usage bill"; MercerMe, "Murphy Signs Two Energy Bills"; Forbes, "Is The U.S. Headed For A Power Grid Crisis?"
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