Photo: Nitat Termmee / Moment / Getty Images
A new report from New Jersey Policy Perspective finds that the rapid expansion of artificial intelligence (AI) data centers is a leading cause behind last June’s 20 percent spike in household utility bills across New Jersey. The study, released earlier this week, highlights how these advanced data centers require enormous amounts of electricity—sometimes as much as 100,000 homes for a single facility—putting pressure on the state’s power grid and driving up costs for residents.
According to the report, New Jersey is now home to as many as 80 data centers, most located north of Trenton. By 2030, these centers could account for nearly 10 percent of New Jersey’s total electricity use. The report argues that families and small businesses are subsidizing the tech industry’s growth through utility rate hikes, tax incentives, and infrastructure upgrades. Artificial intelligence data centers have also been linked to increased water usage and concerns about local air pollution.
Electric rates in New Jersey surged by about $260 per household last year, making it one of the largest increases nationwide. Federal data and statements from regional grid operator PJM point to the demand from AI data centers as a main driver of the higher costs. Most households saw bills rise by more than $20 per month in the summer of 2025, and further hikes may still come.
Industry groups such as the Data Center Coalition say they comply with environmental rules and cover their fair share of energy costs. Yet, the New Jersey Policy Perspective report recommends more oversight and greater transparency, including public reporting on energy and water use.
Environmental and health concerns are also mounting. Large data centers are reported to keep polluting power plants running, contributing to air quality issues and public health costs. In Vineland, Cumberland County, residents have complained about constant noise and water usage from an under-construction 2.6 million-square-foot data center, expected to use enough energy to power a small city and up to 20 million gallons of water each year. Nationally, Consumer Reports notes that hyperscale centers can use millions of gallons of water daily for cooling, and often rely on fossil-fuel backup generators that impact air quality.
Local governments are starting to push back. In Gloucester County, Monroe Township recently introduced an ordinance to potentially ban new data centers. Nationwide, similar concerns are fueling calls for stricter regulations and even temporary moratoriums on new projects.
Governor Mikie Sherrill has responded by freezing some utility rates and promising to prioritize lowering energy costs. The governor has also urged more investment in energy production to meet the state’s rising demand.
As tech companies continue expanding their AI infrastructure, the debate over who should pay for the increased energy demand—and how to balance economic growth with public health—remains unresolved. State lawmakers are considering new policies for oversight, while local communities weigh the pros and cons of hosting these massive facilities.