A5462 2R

Sponsored by:

Assemblyman DAVID BAILEY, JR.

District 3 (Cumberland, Gloucester and Salem)

Assemblyman JOE DANIELSEN

District 17 (Middlesex and Somerset)

Assemblyman CLINTON CALABRESE

District 36 (Bergen and Passaic)

Senator JOHN J. BURZICHELLI

District 3 (Cumberland, Gloucester and Salem)

Senator JOHN F. MCKEON

District 27 (Essex and Passaic)

Co-Sponsored by:

Assemblywomen Donlon, Ramirez, Speight, Peterpaul, Senators Turner, Ruiz, McKnight, Gopal and Greenstein

SYNOPSIS

Requires electric public utilities to develop and apply special rules for large load customers to protect non-large load customers from increased costs.

CURRENT VERSION OF TEXT

As reported by the Senate Budget and Appropriations Committee on January 8, 2026, with amendments.

An Act concerning the provision of electricity to ²[data centers] certain commercial customers² and supplementing Title 48 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. As used in this section:

“Board” means the Board of Public Utilities.

“Electric public utility” means the same as the term is defined in section 3 of P.L.1999, c.23 (C.48:3-51).

¹[“Data] “Large load ²[data¹ center” means a facility: (1) whose primary services are the storage, management, and processing of digital data; ¹[and]¹ (2) that is used to house computer and network systems, including associated components such as servers, network equipment and appliances, telecommunications, and data storage systems, systems for monitoring and managing infrastructure performance, Internet-related equipment and services, data communications connections, environmental controls, fire protection systems, and security systems and services ¹; and (3) has, or is projected to have, a maximum monthly demand of at least 100 megawatts¹] customer” means a commercial customer for retail electric service that is a centralized facility or facilities with an aggregate monthly demand of more than 100 megawatts. Facilities may be aggregated based upon factors such as common ownership, effective control, and electrical infrastructure².

b. No later than 180 days after the effective date of this section, each electric public utility shall file an application with the Board of Public Utilities to establish a tariff for the provision of electricity to ¹large load¹ ²[data centers] customers². ¹The board may establish rates specific to large load ²[data centers] customers² for use by an electric public utility in formulating the tariff.¹ The tariff shall be designed to:

(1) ensure that ²[non-data center ratepayers are protected from any increased costs that result from increased electricity demand caused by ¹large load¹ data centers; and] other electric public utility customers do not subsidize large load customers and all costs attributable to the electric public utility’s large load customers are assigned to the large load customers as determined by the board;²

(2) ²contain protections necessary to ensure that other electric public utility customers are not placed at risk for paying stranded costs associated with the electric public utility serving the large load customer; and

(3)² incentivize ¹large load¹ ²[data centers] customers² to
develop and utilize methods to increase energy efficiency, including through the use of technologies that capture and utilize the heat produced by the ¹large load¹ ²[data center] customer² .

c. The board shall expeditiously review, pursuant to the provisions of section 7 of P.L.1999, c.23 (C.48:3-55) and the rules or regulations adopted pursuant thereto, each application submitted pursuant to this section, and shall approve the application if the board determines that it complies with the requirements of this section and all other applicable laws, rules, and regulations.

d. Commencing one year after the effective date of this section, an electric public utility shall apply the tariff developed pursuant to this section ², as approved by the board,² to each ¹large load¹ ²[data center] customer² within the electric public utility’s service area. The board shall have the authority to determine whether a facility qualifies as a ¹large load¹ ²[data center] customer² pursuant to this section.

¹e. All rates, terms, and conditions established by the board for large load ²[data centers] customers² shall reasonably protect ²[ratepayers] other electric public utility customers² against increased ²transmission and distribution² costs ²[resulting from new transmission, distribution, capacity, or energy rates]² resulting solely or primarily from serving large load ²[data center]² customers. In carrying out the provisions of this section, the board shall require each utility to: (1) ensure that any new large load ²[data]² customer provides adequate financial guarantees that they will ²[take] pay for² at least 85 percent of service they request for a period of not less than 10 years from when service commences; (2) require any new large load ²[data center]² customer to demonstrate, to the reasonable satisfaction of the utility, that the proposed project is unique and not duplicative of any other large load ²[data center] customer² project, whether located in New Jersey or elsewhere, or to identify the project’s interdependencies; (3) provide for the posting of deposits or financial security, in a form approved by the board, sufficient to protect ratepayers against a material increase in rates should the large load ²[data center] customer² project cease operations or take less service than anticipated over the 10-year period beginning when service commences; and (4) implement other provisions that the board deems necessary to protect ratepayers. The board may approve utility rate filings that relax the requirements of this subsection if a large load ²[data center] customer² commits to providing sufficient operational flexibility or commits to bringing additional sources of energy and capacity online to meet its load, such that these requirements are not necessary to protect ratepayers.¹

2. This act shall take effect immediately.