Gov. Sherrill Signs Data Center Transparency Law

Governor Mikie Sherrill signed data center transparency legislation on August 27, implementing the second pillar of New Jersey's four-part data center strategy announced in May. The legislation, S3379/A4096, requires data center owners and operators in New Jersey to disclose their water and energy use, providing municipalities and residents clear information about data center impacts on power, water, and grid capacity.

Data Center Transparency Requirements

The legislation requires data center owners and operators in New Jersey to submit water and energy usage reports to the New Jersey Board of Public Utilities every six months. Reports must include total energy consumption, electricity used by information technology equipment, on-site power supplies, total water use, and water sources.

The reporting requirement initially applies for three years from a data center's first report, with the BPU able to determine whether continuation is warranted. Mandatory disclosure enables public accountability and evidence-based municipal decision-making about data center development.

Governor Sherrill's Four-Part Data Center Strategy

Governor Sherrill's comprehensive data center strategy addresses multiple community concerns. The first pillar, the Data Center Fair Share law (S731/A796), was signed July 7 and establishes a separate rate structure for large data centers to prevent residential customers from subsidizing their electricity and infrastructure costs. The legislation protects ratepayers by ensuring data centers pay proportionate costs.

The transparency legislation represents the second pillar, providing disclosure mechanisms for water and energy impacts.

The third component involves Community Benefits Agreements implemented through state guidance. The Department of Community Affairs issued guidance for municipalities, and the New Jersey Economic Development Authority launched a Data Center Municipal Resource Hub to help local governments evaluate proposals and negotiate with developers. Municipal guidance supports evidence-based decision-making and community benefit negotiation.

The fourth pillar addresses labor standards through guidance calling for prevailing wages on qualifying data center construction projects and encouraging project labor agreements on major developments. Labor standards protections ensure worker protections and community economic benefit.

Union County Life covers New Jersey state policy affecting Union County communities and local news across all 21 Union County municipalities.

Union County Implications and Municipal Guidance

The data center transparency law affects Union County municipalities if data center development is proposed within their boundaries. Data center projects require municipal review, planning board approval, and potential zoning considerations.

The transparency reporting requirements provide Union County municipalities and residents information about data center environmental and infrastructure impacts. Before approving projects, municipal officials can review disclosed water and energy usage data to assess community impacts.

The Community Benefits Agreements guidance and Municipal Resource Hub provide Union County municipalities tools to evaluate data center proposals and negotiate community benefit agreements addressing infrastructure, employment, and community concerns.

Municipal Resource Hub and Support

The New Jersey Economic Development Authority's Data Center Municipal Resource Hub provides Union County municipalities access to expertise, evaluation frameworks, and negotiation support. Municipalities can consult the resource hub when evaluating data center proposals within their boundaries.

The hub supports evidence-based municipal decision-making by providing comparable community benefit agreement examples, infrastructure impact assessment tools, and negotiation guidance based on other municipal experiences.

Ratepayer Protection and Energy Costs

The Data Center Fair Share law protects Union County residents from subsidizing large data center electricity costs through their ratepayer bills. Separate rate structures ensure large data center developments pay proportionate shares of electricity and infrastructure costs rather than shifting expenses to residential ratepayers.

Labor Standards and Workforce Development

Labor standards guidance calling for prevailing wages supports Union County worker protections. Project labor agreements on major data center construction projects ensure prevailing wages and worker protections for construction workers building facilities within Union County.

Water Use Disclosure and Environmental Impact

Water use reporting requirements provide municipalities information about data center water consumption. In regions with water supply concerns, disclosed water usage data enables municipal officials to assess environmental and infrastructure impacts before approving projects.

For Union County Residents and Municipalities

The data center transparency law provides Union County residents and municipalities tools for informed decision-making about data center development. Municipalities evaluating data center proposals can consult state guidance, access the Municipal Resource Hub, and require community benefits agreements protecting resident interests.

Residents concerned about data center environmental or infrastructure impacts can access public disclosure reports through the NJ Board of Public Utilities showing water and energy usage of facilities within their communities.

Find more New Jersey policy guidance affecting Union County communities and local news on Union County Life.

Photo Credit: Gov Mikie Sherrill Facebook

FAQ

Q: What is the New Jersey data center transparency law?
A: S3379/A4096, signed by Governor Sherrill on August 27, 2026, requires data center owners and operators to disclose water and energy usage to the NJ Board of Public Utilities every 6 months.

Q: What information must data centers disclose?
A: Total energy consumption, electricity used by IT equipment, on-site power supplies, total water use, and water sources.

Q: How long does the reporting requirement last?
A: Initially three years from a data center's first report. The NJ Board of Public Utilities can determine whether reporting continues beyond 3 years.

Q: How does this protect Union County residents?
A: Transparency enables municipalities to assess environmental and infrastructure impacts before approving projects. Data on water and energy usage supports informed municipal decision-making.

Q: What is the Data Center Fair Share law?
A: Signed July 7, S731/A796 establishes separate rate structures for large data centers, preventing residential ratepayers from subsidizing their electricity and infrastructure costs.

Q: What is the Municipal Resource Hub?
A: The NJ Economic Development Authority's Data Center Municipal Resource Hub provides Union County municipalities tools to evaluate data center proposals, negotiate community benefits agreements, and access expertise.

Q: What are Community Benefits Agreements?
A: State guidance enables municipalities to negotiate agreements with data center developers addressing infrastructure improvements, employment, environmental protections, and community impacts.

Q: What labor protections does the state provide?
A: State guidance calls for prevailing wages on qualifying data center construction projects and encourages project labor agreements on major developments to protect construction workers.

Q: How can Union County municipalities use this law?
A: Municipalities can consult state guidance, access the Municipal Resource Hub, require data center reporting, and negotiate community benefits agreements before approving projects.