If your electric bill felt heavier last year, you weren't imagining it. New Jersey residents saw their electricity costs jump by 20% in 2025, and a new report points to an unexpected culprit: the massive data centers powering our increasingly digital world.
According to research released yesterday by New Jersey Policy Perspective, a Trenton-based think tank, data centers now account for nearly 70% of the increased demand on our regional electric grid. These warehouse-sized facilities, which process everything from social media posts to artificial intelligence calculations, are consuming electricity at unprecedented rates—and everyday ratepayers are picking up the tab.
The Scale of the Problem
The numbers are staggering. By 2030, data centers are projected to consume nearly 10% of New Jersey's total electrical usage—equivalent to powering the entire state of Rhode Island. These facilities don't just use electricity; they guzzle it. Nationwide, large AI data centers consumed approximately 14 billion gallons of water in 2024 alone for cooling purposes, a figure expected to double by 2028.
The surge in demand has driven up wholesale electricity prices, costs that utility companies pass directly to residential customers and small businesses. The report argues that current regulations lack any mechanism to shield families and local shops from subsidizing these industrial-scale operations.
A Battle Over Economic Development
The issue has sparked debate among business leaders and policymakers about New Jersey's economic future. Industry executives argue that attracting data centers is essential for our state's competitiveness in the technology sector.
"It's critical for New Jersey for our long-term competitiveness to be a player" in attracting data centers, said Mike Renna, President and CEO of South Jersey Industries. "It will take us a long time to recover if we are on the sidelines."
Kim C. Hanemann, President and COO of PSE&G, echoed this sentiment: "We shouldn't be losing the economic opportunity. I think we should get the rules right to attract and retain them in our state."
But New Jersey Policy Perspective counters that economic development shouldn't come at the expense of everyday residents. "Electricity rates are set by the utility providers in New Jersey and approved by the Board of Public Utilities," the report states. "Yet there are currently no mechanisms in place to protect everyday ratepayers, such as families and small businesses, from higher costs due to data center buildout."
Legislation on the Horizon
Relief may be coming. Legislation currently moving through Trenton aims to require large data centers—those using more than 100 megawatts of electricity—to pay their own infrastructure costs rather than passing them along to other ratepayers. The proposed policy would create a firewall between industrial energy consumption and residential bills.
The measure represents an attempt to thread a delicate needle: welcoming the jobs and tax revenue that data centers bring while protecting our community from bearing the financial burden of their massive energy appetite.
What This Means for You
As artificial intelligence and cloud computing continue their explosive growth, the demand for data centers shows no signs of slowing. For New Jersey families already stretching budgets, the question isn't whether these facilities will keep expanding—it's who will pay for the electricity they consume.
The decisions our lawmakers make in the coming months will determine whether your electric bill continues climbing to subsidize Big Tech's infrastructure, or whether these corporations cover their own costs. It's a conversation worth following closely—your monthly budget may depend on it.
