State regulators are writing rules meant to keep data center costs off other customers’ bills. The public can weigh in at a Nov. 4 meeting or in writing through Nov. 13
Data centers are all over the news right now. With elections around the corner, the controversial topic remains a key plank of many candidate platforms, especially in New Jersey. In September, one New Jersey data center got hit with a $1.07 million fine, the largest against a data center in state history.
Among the list of traits that residents oppose when it comes to data centers, electricity use is near the top, which raises another question: could you end up paying for the electricity a data center uses? New Jersey’s Data Center Fair Share Act, which Gov. Mikie Sherrill signed on July 7, is designed to prevent that by keeping the costs of serving large data centers off other customers’ bills, according to the New Jersey Vindicator.
But the rules that will make it work haven’t been written yet, and the state Board of Public Utilities (BPU) is seeking public input, including at a virtual meeting on Monday, Nov. 2.
How the Law Is Designed
According to the BPU’s notice, the law requires large data center customers to be responsible for the costs associated with connecting to the grid and using it. This includes system upgrades and the risk of “stranded” assets, meaning infrastructure a utility may not be able to pay off if a data center closes or never reaches its planned size. The BPU says its standards are meant to protect ratepayers against material increases in rates.
According to the notice, the law:
- Requires large data centers to provide financial guarantees covering at least 85% of the electricity they request, for 10 years from the start of service
- Requires large data centers to reduce their power use before residential customers face reductions during system emergencies, with an exception for designated critical load
- Creates a voluntary program that lets data centers fund demand reductions by other customers and receive credit for them
Regulators Are Still Deciding
The BPU has 12 months from the law’s enactment to set standards. Utilities then have 180 days to file proposed rates. The notice poses questions to the public on how to define a “large data center,” how to apply the 85% guarantee when a facility ramps up over several years, and what happens if a data center ends service early.
The notice also asks how to keep developers from evading the rules. The law says if a data center is under common ownership or control, on the same or contiguous sites, or sharing substantial infrastructure, then it must be treated as one large data center.
A federal ruling could complicate the rules. The notice says the Federal Energy Regulatory Commission rejected a proposed framework from the regional grid operator, PJM Interconnection, on Oct. 9, and the BPU’s standards will have to work alongside whatever PJM does next.
How to Weigh In
To weigh in, there are two ways:
- Stakeholder meeting: Wednesday, Nov. 4, 10 a.m. to noon, on Zoom. Register here. To speak for up to three minutes, reserve a slot while registering. The BPU asks for registration at least 48 hours ahead, which is about 10 a.m. Monday, Nov. 2.
- Written comments: due 5 p.m. Friday, Nov. 13, under docket EO26080463. Use the “Post Comments” button, or write to the Secretary of the Board at 44 South Clinton Ave., 1st Floor, PO Box 350, Trenton, NJ 08625-0350, or email [email protected]. Comments are public records.
This story draws on reporting by Krystal Knapp of the New Jersey Vindicator and on the BPU’s public notice.
Peter Candia is the Food + Drink Editor at New Jersey Digest. A graduate of The Culinary Institute of America, Peter found a passion for writing midway through school and never looked back. He is a former line cook, server and bartender at top-rated restaurants in the tri-state area. In addition to food, Peter enjoys politics, music, sports and anything New Jersey.
