New Jersey Governor Mikie Sherrill introduced a plan to place guardrails on data centers amid growing concerns from communities across the country over rising utility costs and environmental impacts. Data centers are facilities used to house computer systems and serve as infrastructure for storin g and processing information. They also support the global financial system, cloud services, machine learning and artificial intelligence. Rising electricity costs and a strain on electric grids fueled by the growth of the AI industry have led to significant backlash to new data centers from communities across the country, including towns and neighborhoods in New Jersey and Pennsylvania. A report from the U.S. Congress Joint Economic Committee that was released in March shows that residents in New Jersey paid about $260 more in utilities in 2025 which is more than double the national average. Gov. Sherrill declared a state of emergency on utility costs during her inauguration in January. She also signed two executive orders to freeze rate hikes and expand power generation. Other critics of data centers have expressed concerns about their environmental impact. Earlier in May, a group of New Jersey environmental, labor and community leaders sent a letter asking Gov. Sherrill for a moratorium on the approval and construction of new faciliies that use 20 megawatts of power or more, according to the Philadelphia Inquirer. During a Wednesday morning press conference at the Executive State House in Trenton, New Jersey, the governor laid out a four-part plan that she described as the country’s first comprehensive strategy in establishing clear guardrails for data centers. “Data centers are among the biggest drivers of energy costs, which I am working tirelessly to bring down. While many states are approaching this issue piecemeal, this is the first comprehensive plan to tackle it holistically. At the same time, New Jersey will take a thoughtful approach to harnessing investment, lowering costs for ratepayers, and leading on AI innovation,” Governor Sherrill said. “By establishing these guardrails, we will hold data centers accountable, ensure they contribute their fair share, and make sure our communities not only benefit from the AI innovation happening in our state, but have a real hand in shaping it.”  The governor’s plan includes the following: Demanding that data centers pay their own way Part one of the governor’s plan would establish a set of rules demanding that data centers “pay their own way.” The rules would require data centers to contract with their own power generators and pay for grid upgrades that are needed to handle a larger load. “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,” Sherrill said. Transparency from data centers Part two of the governor’s plan would require transparency from data centers. “People deserve to know what’s being built in their communities and what shared resources are being used,” she said. “Today the public has no clue how much energy any of these data centers actually need.” Sherrill said she plans to “mandate transparency” by requiring data centers to report energy and water usage to the public every six months. She also said New Jersey legislators have been working on bills to address the first two parts of her plan. “I look forward to working together to get strong bills to my desk as soon as possible,” she said. Engaging with the community Part three of the governor’s plan would require that data centers engage with and invest back into the communities where they’ve been built. “This isn’t an uncommon ask,” she said. “For a long time in America, it was understood that if a business wants to thrive in a community, it has to give back to that community. So, we’re developing strong, statewide guidelines for community benefit agreements for this industry.” Sherrill said the agreements will require data centers to address issues such as noise, light and pollution as well as invest in schools, housing and other community needs. Jobs to “raise a family on” The final part of Sherrill’s plan would require that data centers create jobs in both initial construction and long term operations that workers can “raise a family on.” “It’s simple. In New Jersey we have the best trained work force in America,” she said. “If you’re going to build a data center here, you should be using union labor and paying prevailing wages. I’ve been clear. I’m on a mission to drive down energy costs in our state. This is an important part of that. It’s government doing its job.” You can watch the governor’s entire press conference here or in the video embedded on top of this article. ...read more read less