Sherrill’s weak data center reporting is barely better than Murphy’s subsidy

Gov. Rebecca “Mikie” Sherrill signed legislation Thursday requiring data center developers to disclose their water and energy consumption every six months, while simultaneously ending a $500 million tax credit program that former Gov. Phil Murphy created to lure artificial intelligence companies to the Garden State.

The twin actions wete billed as a mark a sharp reversal from the Murphy era, when state officials handed out hundreds of millions in incentives to an industry that Sherrill said has been operating “in the shadows.”

Critics say that the legislation is a smokescreen for a government that has capitulated to tech industry moguls.

The new law forces operators to report total energy use, cooling and IT consumption, peak daily water draw, water sources, and backup power supplies to the state Board of Public Utilities.

It does not stop development of the water and power guzzling facilities that consume millions of gallons for cooling and put enormous loads on the electric grid, all to keep rows of servers humming around the clock.

“New Jerseyans deserve to know how much water and electricity the data centers coming into their community will use,” Sherrill said at a signing ceremony in South Brunswick. “Data center companies often treat their usage statistics like a trade secret. We will not let these developers operate in the shadows.”

The reporting requirement arrives after years of public pressure from residents in more than three dozen towns that voted to block data center construction.

Those facilities, critics say, devour electricity at rates that drive up utility bills for ordinary households while consuming millions of gallons of water for cooling.

The bill’s sponsor, Sen. Teresa Ruiz, called the disclosure “the start of an ongoing public record.”

But the ink was barely dry before the law’s contradictions became apparent. A carve-out limits how much of the reported data will be released under the state’s Open Public Records Act.

Companies will face no independent verification or audit of their self-reported figures. The state’s own transparency law will keep much of the information in the dark.

“Data center reporting for energy and water use after the damage is done is the antithesis of guardrails,” said Jaclyn Rhoads, executive director of the Pinelands Alliance.

“The rapid and unregulated development of data centers is a major threat to the pocketbooks of all New Jersey utility customers,” said New Jersey Citizen Action Executive Director Dena Mottola Jaborska.

Climate Revolution Action Network New Jersey (CRAN) pushed for real restrictions, pointing to the strain that data centers put on the electric grid and clean water supply, and the need to protect New Jersey’s sensitive environment.

Dozens of CRAN activitists protested outside the bill signing ceremony in South Brunswick.

“Every week we’re seeing more and more towns stand up to Big Tech and block their massive AI data center,” said Ben Dziobek, Executive Director of CRAN. “People across New Jersey have figured out that these data centers are a bad deal, and they’re not waiting around for our state lawmakers to notice.”

The governor pushed back against calls for a statewide moratorium, insisting that data centers “will play by our rules.” She also announced new guidance to help towns negotiate community benefits agreements with developers on noise, lighting, and local infrastructure.

Yet the most damning part of Thursday’s action is what it says about the previous administration. Murphy, Sherrill’s predecessor, did not merely welcome these facilities.

He greased the skids with half a billion dollars in taxpayer money. That was the bargain: New Jersey would pay rich technology companies to build power-hungry warehouses that strain the grid, drain aquifers, and offer little in return beyond the vague promise of an AI boom.

It was a classic Trenton deal. The public got the bill. The developers got the subsidy. The politicians got the ribbon-cutting. And the numbers stayed in the shadows, because the numbers would have embarrassed everyone involved.

Now the subsidy is gone, and the reporting requirement is law. That is progress, but it is the progress of a homeowner who discovers a leak after the basement has already flooded.

The data centers are here. The transmission lines are being planned. The water contracts are being signed. A disclosure form every six months will not unring that bell.

Sherrill deserves credit for ending a giveaway that never should have existed. But the deeper problem remains: New Jersey is still inviting an industry that cannot promise to be a good neighbor because its entire business model depends on consuming resources the state does not have to spare.

A reporting requirement is not a guardrail. It is a receipt. And the public is still paying.