Pennsylvania and New Jersey Lawmakers Move to Shield Consumers from Soaring Data Center Energy Costs
Elected officials in Pennsylvania and New Jersey are advancing legislative measures to protect residents from rising electricity bills driven by the rapid proliferation of artificial intelligence data centers. As the energy-intensive facilities expand across the region, lawmakers in both states are introducing regulatory frameworks intended to prevent utility ratepayers from subsidizing the massive power demands of the technology sector.
In Pennsylvania, Governor Josh Shapiro addressed the issue during his 2026-27 fiscal year budget address on Tuesday, unveiling the “Governor’s Responsible Infrastructure Development” (GRID) plan. The proposal seeks to prevent developers from passing infrastructure costs onto residents by requiring data centers to either supply their own power or fund any new generation capacity they require. Additionally, State Representative Robert Matzie has sponsored HB1834, legislation that directs the Public Utility Commission to draft regulations shielding ratepayers from cost spikes associated with data center development. Pennsylvania Senator Lindsey Williams is also backing measures that would require these facilities to contribute to the Low-Income Home Energy Assistance Program (LIHEAP), noting that while some centers operate “behind the meter,” they still influence regional capacity prices.
Across the Delaware River, New Jersey lawmakers have moved Bill A5462, sponsored by Assemblyman Dave Bailey Jr., to the governor’s desk. The legislation mandates that electric public utilities establish special rate structures for data centers with an aggregate monthly demand exceeding 100 megawatts. The bill ensures that costs for necessary grid upgrades are assigned directly to the industrial customers rather than spreading the financial burden across residential households. Simultaneously, Senate legislation sponsored by Senators Bob Smith and John McKeon proposes requiring new AI data centers to source their power from clean energy projects to avoid overwhelming the existing grid.
The legislative push comes in response to market volatility within the PJM Interconnection, the regional grid operator serving 13 states including Pennsylvania and New Jersey. Recent capacity auctions saw prices jump more than 800%, a spike that independent monitors have largely attributed to the forecasting of immense load growth from data centers. Utility analysts warn that without intervention, the cost of securing power reliability will increasingly appear on monthly consumer bills.
Industry representatives, however, have raised objections to the strict mandates. Dan Diorio, vice president of state policy for the Data Center Coalition, has argued that prescriptive legislation could stifle investment and prevent the industry from deploying capital for clean energy solutions. Proponents of data center expansion emphasize the economic benefits, including significant tax revenue and job creation, warning that aggressive regulation might drive the booming tech sector to other regions with more favorable business climates.
Background data underscores the scale of the challenge. A single large data center can consume as much electricity as a nuclear power plant generates, placing unprecedented strain on transmission infrastructure. With the artificial intelligence sector expected to double its energy consumption by the end of the decade, the debate over who pays for the necessary grid expansion remains a central policy challenge for the Mid-Atlantic region.
inquirer.com
inquirer.com
andrewzwicker.com
youtube.com
assemblydems.com
njsendems.org
whyy.org
