Requires BPU to conduct study on environmental, infrastructural, and financial impacts of data center development in State.

2026-2027 Regular Session Introduced by Jim Beach and 1 co-sponsor

The bill requires the BPU to study data center energy use, water use, grid and environmental impacts, and report policy recommendations within 12 months.

Introduced in the Senate, Referred to Senate Environment and Energy Committee

Overview

S 4401 (Session 222) from New Jersey would require the Board of Public Utilities (BPU) to study the environmental, infrastructural, and financial impacts of data center development in the state and to report findings to the Governor and Legislature within 12 months of the bill’s effective date. The act is designed to inform policy and potential regulation related to data centers, including energy use, water consumption, grid effects, land use, environmental considerations, public health, and fiscal impacts.

Key provisions and changes

Definitions:

“Board” = Board of Public Utilities (BPU).
“Data center” means a facility whose primary services are storage/management/processing of digital data, housing IT and related infrastructure, with an aggregate IT load greater than 1 megawatt.
“Information technology load” (IT load) = electrical load of computing, data storage, and networking equipment at the point of power delivery.

Study obligation:

The BPU must complete a study within 12 months after the bill’s effective date.
The study must address, at a minimum: 1) Energy consumption and water usage of data centers in the state. 2) Effects on the electric grid from data center development. 3) Effects on air quality and noise pollution. 4) Land use and potential data center projects, including forest land clearing. 5) Potential environmental degradation and electronic waste generation. 6) Data centers’ energy demand, water use, and impacts on local infrastructure and power grids. 7) Potential public health impacts. 8) Adverse fiscal impacts, including potential increases in utility rates. 9) Energy efficiency of data centers, fossil fuel usage, and use/effectiveness of renewable energy. 10) Recommendations for legislative action or new regulations to mitigate adverse impacts.

Stakeholder engagement:

The BPU must solicit input from interested stakeholders.
The BPU must hold at least one public hearing during the study process.

Effective date: The act takes effect immediately upon enactment.

Who/what is affected

Primary: Board of Public Utilities (BPU), as the agency conducting the study and producing the report.

Data centers in New Jersey and related sectors (energy, water, infrastructure, environmental bodies) that could be impacted by regulatory actions or policy changes informed by the study.

Stakeholders and the general public who may participate in hearings and provide input.

Procedural and timeline notes

Effective date: Immediately upon enactment.

Study deadline: Within 12 months of the effective date.

Reporting: To the Governor and Legislature (in line with existing reporting requirements under N.J.S.A. 52:14-19.1, through the State’s formal report channels).

Public engagement: At least one public hearing and broader stakeholder input sought during the study.

Potential impact (high-level)

Establishes a data-driven basis for any future legislation or regulation targeting data centers, particularly around energy use, water resources, environmental impacts, land use, and utility rates.

Encourages transparent governance through public hearings and stakeholder involvement.

Could influence siting, permitting, and incentive structures for data centers based on environmental and infrastructural considerations.

Bill