New massive AI data centers are driving up electric bills for NJ residents

🔴 Electric rates in New Jersey will skyrocket on June 1

🔴 You're paying for massive AI data centers

🔴 One data center requires the full capacity of a small nuclear plant

Electric rates for New Jersey residents will suddenly skyrocket by 20% on Sunday because artificial intelligence is driving up the need for power, and the grid isn't keeping up.

Utility companies, including JCP&L, PSE&G, Atlantic City Electric, and Rockland Electric, say they won't make any profit on the massive rate hikes. These companies distribute electricity to New Jersey homes and businesses.

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Democrats, including Gov. Murphy and the state Board of Public Utilities, have instead placed the blame for the price hikes on PJM, the regional grid operator.

PJM handles how energy is distributed to 12 states and Washington, D.C.

Critics say PJM has failed to approve projects to generate electricity in the face of a looming energy crisis.

New Jersey's need for new electricity generation

One major reason electricity prices are going to soar is a projected higher demand for power.

By far, the biggest contributor to this increase over the next several years will be data centers for artificial intelligence, according to an April analysis from Synapse Energy Economics Inc.

New, massive AI data centers will make up 70% of the expected power demand. These facilities are made up of rows of computers and servers, along with the elaborate air conditioning required to cool this equipment.

A single Hyperscale Data Center in San Antonio, Texas, will have 1.5 million square feet of data center space, the Associated Press reports. One data center sucks up enough electricity to power 400,000 electric cars, according to the International Energy Agency.

Why are you paying for electricity for data centers?

In New Jersey, a new data center being built by Nebius is under construction in Vineland. It's expected to go online in fall 2025.

The Vineland data center will use up to 300 MW, the same capacity that can be generated by a small modular nuclear reactor.

READ MORE: Murphy embraces new NJ nuclear reactors amid energy crisis

Making things worse, data centers built outside New Jersey will also increase electric rates for ratepayers in the Garden State.

Because PJM handles electricity transmission for 12 states and Washington, D.C., any AI data centers built in the region will drive up demand on the grid.

That increase in demand increases power costs for all 67 million customers, including those in New Jersey.

Snags in creating new electricity supply

According to a new May 2025 report from New Jersey Policy Perspective, large-scale projects to generate electricity are being held up by PJM.

The report from NJPP, a left-leaning think tank, found that over 95% of pending projects in PJM's queue — including 79 in New Jersey — are clean energy generation and energy storage.

However, PJM spokesperson Dan Lockwood said the impression that the operator is holding up clean energy projects is based on old information. PJM updated its processes in 2022, he said.

There are around 63 GW worth of projects still in the queue that should go through the process before the end of 2026, Lockwood said.

"We also have another 46 GW of projects that have cleared PJM's interconnection process and are free to build and plug into the grid. An overwhelming majority of these projects are renewables," Lockwood said.

Who are the members of PJM?

Alex Ambrose, who authored the NJPP report, says the delays are partly due to many of PJM's voting members being owners of utility companies and power plants.

"Frankly, a lot of those members benefit from keeping older, less economical power plants running, like coal and natural gas, which prevents newer sources of renewable energy from serving our region," Ambrose said.

But Lockwood said the grid operator has more than 1,000 members equally distributed across five sectors. He said PJM has more than 400 stakeholder meetings each year, and most are open to the public.

Make AI data centers bring their own clean energy

One bill in the state legislature (S4143) would make data center companies build their own solar farms and wind farms so they don't draw on the existing electricity supply.

"That is a fantastic way to make sure that these corporations that benefit from being in New Jersey don't pass on the cost of AI data center energy needs to regular working-class families," said Ambrose.

ALSO SEE: Outrage over plan to delay huge NJ electric rate spike

In March, the bill passed in the Senate Environment and Energy Committee with support from Democrats on a 3-2 party-line vote.

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