TRENTON, N.J. — Governor Mikie Sherrill signed three energy bills into law on Tuesday, July 7, while announcing one-time credits on this summer’s electric bills for every residential customer in the state. Her administration said the package, combined with actions taken over the past six months, is expected to save New Jersey ratepayers more than $1 billion annually, citing an analysis by Synapse Energy Economics.
The centerpiece of the legislative package is a first-of-its-kind policy aimed at the massive data centers powering the artificial intelligence economy.
Under the new Data Center Fair Share law, sponsored by Assemblyman Dave Bailey Jr. and Senator John Burzichelli, New Jersey will create a separate utility rate class for data centers with peak electricity demand of at least 50 megawatts. Instead of spreading the costs of new grid infrastructure across households and small businesses, those large facilities will be responsible for paying for the electric system upgrades needed to support their own operations.
The New Jersey Board of Public Utilities (BPU) has 12 months to establish the new rules.
Speaking during an event in Camden, Sherrill said the law is designed to protect everyday ratepayers.
“We’ve set them aside in a separate class of utility users, so that if we have storms like this, they will be first impacted, not normal ratepayers,” she said.
The legislation also encourages large data centers to bring additional clean energy generation onto the grid and requires them to reduce electricity usage first when demand approaches system capacity.
A second bill eliminates what supporters describe as an outdated financial incentive that allowed utilities to earn an additional return on equity simply because they participated in PJM Interconnection, the regional electric grid operator serving 13 states and the District of Columbia. Those costs were passed on to customers through transmission charges.
Supporters estimate eliminating the incentive will save ratepayers approximately $60 million annually.
The third measure, known as the Advanced Grid Technologies Act, increases state oversight of major transmission investments. Utilities will now be required to obtain a Certificate of Public Convenience and Necessity before undertaking certain supplemental transmission projects.
Under the law, the BPU must act within 180 days under the standard review process or 120 days if utilities use advanced transmission technologies.
According to the governor’s office, supplemental transmission projects accounted for 79% of New Jersey’s transmission costs between 2008 and 2025, totaling approximately $14.7 billion. Citing the Rocky Mountain Institute, the administration noted that while New Jersey represents roughly 12% of PJM’s electricity demand, it accounts for nearly 22% of the regional grid’s supplemental transmission spending—the largest disparity of any state in the PJM system.
Alongside the legislation, Sherrill announced a $25 Residential Universal Bill Credit for all 3.6 million residential electric customers. Lower- and moderate-income households will receive an additional $150 through the Residential Energy Assistance Payment Program.
The Board of Public Utilities also renewed its Summer Termination Program, which prevents utility shutoffs for eligible vulnerable households during periods of extreme heat, and approved 12 new solar projects expected to generate enough electricity to power approximately 45,000 homes.
Assembly Speaker Craig Coughlin said the legislation closes a loophole that had unnecessarily increased costs for ratepayers under previous federal policy. BPU President Ben Hertz-Shargel joined the governor during the bill-signing ceremony.
Republican lawmakers criticized the package, arguing that while it increases oversight and changes cost allocation, it does not address New Jersey’s underlying electricity supply challenges by adding new power generation.
They also pointed to the size of this year’s universal bill credit. The $25 payment is significantly smaller than last year’s $100 credit, coming just days after severe July Fourth weekend storms left roughly 200,000 customers without power at the peak of the outages.
Sherrill acknowledged that the data center legislation alone will not immediately reduce electricity prices because wholesale power costs are set across the broader PJM regional market. New data centers built in neighboring states can still affect electricity prices in New Jersey, just as projects built in New Jersey can influence prices throughout the region.
Still, the governor said other states are already studying New Jersey’s approach to ensuring that the rapidly growing artificial intelligence industry pays a larger share of the infrastructure costs it creates.
For New Jersey families and small business owners facing another summer of high electricity bills, the immediate benefit comes in the form of bill credits. The longer-term impact will depend on how regulators implement the new laws over the next year and whether shifting more infrastructure costs to large energy users ultimately delivers the promised savings for ratepayers.
JBizNews Desk | Trenton
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