Good morning Chair and members of the committee. Thank you for the opportunity to testify in favor of A5564, which requires AI data centers to plan for their energy usage and to derive all electricity from clean energy sources.
At a time when affordability is out of reach for so many families, I appreciate the state taking actions to address the cause of the upcoming utility bill increases. Most of us already know that the main driver of these increases is a combination of PJM’s slow interconnection process which is bottlenecking supply, and a surge in projected demand. But what some of you may not know is that 70 percent of that increase in demand is due to AI data centers.[i] It is concerning that residential ratepayers like you and I are now paying the cost for AI data centers, and it’s also important all the PJM states work together to craft policies like this one to prevent this problem in the future.
According to the Energy Information Administration, in 2022 New Jersey consumed over six times as much energy as we produced.[ii] We know as a state we are a net importer of energy, and we may always be. We need proactive planning, like what’s proposed in this bill, to reduce in-state demand and increase supply, which will ultimately protect ratepayers.
Another note about AI data centers is that they are not necessarily the economic boon some may think they are. Data centers, once constructed, need very few workers in very large spaces. One data center CEO operator, John Johnson of Patmos Hosting, even said, “Data centers have rightly earned a dismal reputation of creating the lowest number of jobs per square foot in their facilities.”[iii] This means they will not bring lasting economic benefits to our communities.
I want to end by pointing out that adding newer, safer, and more reliable sources of energy to our grid will increase reliability and drive down costs. Currently less than 4 percent of the energy we generate as a state comes from renewables–the majority of the rest comes from nuclear and natural gas.[iv] As a comparison, the national average for renewables is over 21 percent.[v] We all agree we need more energy, and we need to diversify our energy portfolio with reliable sources like solar and wind paired with battery storage.
Data centers are driving up prices for consumers, draining our energy grid, and may not bring significant long-term economic benefits to our communities. But if they do want to come to our state, it makes sense to ask them to bring additional energy sources, and those sources may as well be clean and reliable. This is one way to protect ratepayers from higher costs. Thank you.
End Notes
[i] Chavin, Sabine, et al.Tackling the PJM Cost Crisis. Evergreen Collaborative. Apr. 15, 2025. p.6.
[ii] NJPP analysis of New Jersey State Profile Data. U.S. Energy Information Administration.
[iii] Dotan, Tom. “The AI Data-Center Boom Is a Job-Creation Bust.” Wall Street Journal. Feb. 25, 2025.
[iv] See “Utility-Scale Net Electricity Generation” at New Jersey State Profile Data. U.S. Energy Information Administration.
[v] Ibid.
