New Jersey is taking steps to establish a more comprehensive framework for data center development, with new requirements addressing energy and water consumption, utility costs, community investment and labor standards.
Governor Mikie Sherrill recently signed legislation advancing the Administration’s statewide data center plan, which is centered around four areas: fair-share energy rules, energy and water transparency, community investments and good-paying jobs.
New Energy and Reporting Requirements
One of the newly enacted measures, S-731/A-796, establishes a separate ratepayer structure for large-load data centers. The Associated Construction Contractors of New Jersey (ACCNJ) opposed the legislation during the legislative process, expressing concern that the resulting tariff could discourage future data center construction in the state.
A second measure, S-3379/A-4096, introduces new reporting requirements for data center operators. Under the law, operators will be required to report energy and water usage to the New Jersey Board of Public Utilities twice annually for three years. Facilities receiving state financial incentives will be subject to additional reporting requirements intended to measure progress toward sustainability goals.
Community and Labor Considerations
New Jersey’s approach extends beyond utility and environmental considerations. The Department of Community Affairs has issued guidance concerning Community Benefit Agreements, providing municipalities with additional tools when negotiating with developers proposing data center projects.
Labor requirements are another significant component of the state’s approach. Data center construction is already subject to prevailing-wage requirements established under prior legislation, and recent state guidance addresses labor standards for these projects as well as opportunities to utilize Project Labor Agreements.
What This Could Mean for New Jersey’s Construction Industry
As demand for data center infrastructure continues to create potential development opportunities, New Jersey contractors and developers will need to account for an evolving regulatory environment surrounding these projects.
Energy costs and reporting obligations, municipal negotiations, prevailing-wage requirements and potential Project Labor Agreements could all become important considerations when planning and executing future data center developments.
For contractors, developers and other project participants, staying informed about additional legislation, regulations and state guidance will be important as New Jersey continues to shape its approach to data center construction.