NJ Utility Bills Went Up 20%. New Report Says Data Centers Are To Blame.

A new report by think tank New Jersey Policy Perspective found that AI data centers could be to blame for high utility costs. 

The analysis projects that “by 2030, data centers will consume nearly 10% of the state’s entire electrical usage,” an amount equivalent to the total energy consumption of Rhode Island.

According to the findings, a typical large data center focused on AI requires as much energy as 100,000 households. This rising demand is already influencing regional energy markets; the report notes that AI data centers accounted for 70% of the increased energy demand during the 2025-26 capacity auction. This auction directly contributed to a 20% spike in electric bills for New Jersey residents in June 2025, analysts said.

The report suggests that “families and small businesses are subsidizing big tech expansion through higher bills and continued exposure to power plant pollution.” Report authors argue that while utility companies claim to keep data center costs separate, ratepayers often bear the burden of necessary transmission infrastructure upgrades. 

The study also highlights the high cost of corporate incentives used to attract these facilities. New Jersey currently offers up to $500 million in tax credits through the Next New Jersey program. The report points to Virginia as a cautionary example, where a similar sales tax exemption cost the state $1.6 billion, representing more than 20% of its total sales tax revenue

The analysis also questions the long-term job creation associated with data centers. While construction provides a temporary employment boost, the facilities require relatively few staff once completed. The report indicates that data centers typically employ about 50 people per 250,000 square feet. By comparison, warehouses of the same size generate approximately one job for every 600 square feet, while office spaces provide one job per 190 square feet.

To mitigate these risks, New Jersey Policy Perspective recommends that policymakers create a standard regulatory definition for data centers, remove or restrict industry-specific subsidies, and implement strict transparency requirements for water and energy reporting.