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By Kate Plummer
Senior US News Reporter
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New Jersey assemblywoman Andrea Katz is preparing legislation to make data centers in the state pay for the electricity they use.
Katz, a Democrat, announced in September that she was introducing a bill to impose a surcharge on data centers. The supercharge would then be used to modernize New Jersey's grid.
Katz told Newsweek the bill has now been drafted and will be introduced when the Assembly's recess ends next month.
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Why It Matters
According to research from infrastructure watchdog DataCenterMap, there are currently 4005 active data centers registered in the U.S.
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They provide the processing power that fuels internet searches and artificial intelligence queries. They are used to run services including Uber, Netflix and Amazon, and President Donald Trump has pledged to expedite permits to build more in an effort to encourage AI development. But while they are useful for the local economy and investment, they contribute to rising utility bills because they require a lot of power.
Nationwide, the average price of residential electricity increased 6.5 percent from 16.41 cents per kilowatt-hour to 17.47 cents between May 2024 and May 2025, the EIA reports.
Being seen to be dealing with soaring energy costs will be particularly important for lawmakers ahead of the gubernatorial elections this month.
What To Know
Speaking to Newsweek, Katz said she was "hopeful" the legislation "will move swiftly through the legislature because we know two of the major causes of the utility price crisis are data centers gobbling up tons of energy and the crumbling infrastructure. This will address both of them and bring down costs."
She added that data centers would "have to pay for their peak electricity demand and that money will go toward grid modernization" if the bill is passed.
"It will incentivize the data centers to be more efficient and all of the money they pay will go toward improving the grid," she said. "These data centers are coming in without bringing many jobs and it will be a way for them to contribute to the communities they’ve moved into."
However, it may prove difficult to pass the legislation as efforts in other states like Virginia have previously failed.
What People Are Saying
Writing on X, Katz said: "Utility rates are on the rise and there are many reasons for it. The strain that data centers add to our crumbling infrastructure is one of the major ones. My bill would make these data centers pay their fair share to rebuild our grid. It’ll bring down costs for all of us."
Virginia state delegate Shelly Simonds, a Democrat, told NBC News: "Voters are mad as hell about energy prices increasing. And they’re mad about affordability in general. And anybody who ignores these issues does so at their peril. It’s definitely going to be an issue during the midterms."
What Happens Next
When the bill is introduced, it will have to be passed by the legislature and approved by the governor if it is to go into effect.
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