By Kin Gee
In a June 28 opinion piece on New Jersey’s growing data center industry, Mara Tippett, executive director of the Raritan Headwaters Association, observed: “All decisions on land use – what to build, where to build it, and at what scale – are effectively water decisions as well.”
That simple statement captures a much larger reality. Data centers are not just technology projects – they are major consumers of water and electricity, with significant long-term consequences for our environment, utility infrastructure, and ratepayers.
Modern data centers require enormous amounts of freshwater to cool servers operating around the clock. A single large facility can consume up to 5 million gallons of water every day, roughly the daily water needs of 50,000 people.
That level of consumption should give every New Jersey resident pause.
Our state has endured prolonged dry conditions, and much of New Jersey remained under drought warning late last month. Against that backdrop, approving water-intensive data centers without comprehensive statewide planning is both unsustainable and irresponsible.
HIGHER ELECTRIC BILLS
The impact extends to consumers’ pocketbooks. New Jersey residents are already struggling with soaring electric bills. For many households, monthly electricity costs are now as much as 267% higher than they were just five years ago.
Demand from data centers is a significant contributor to that trend. At the 2024 regional electric capacity auction – the auction that helps determine future electricity costs throughout our region – demand from data centers accounted for approximately 63% of the increase in capacity prices.
Although Gov. Mikie Sherrill has temporarily frozen certain electric rate increases, the growing pressures on the electric grid remain. As artificial intelligence continues its rapid expansion, the demand for computing power – and therefore for additional data centers – will accelerate.
Without thoughtful planning, New Jersey families and businesses will continue paying the price.
STATEWIDE PROBLEM
Gov. Sherrill has proposed establishing “guardrails” for data center development. Greater transparency, reporting requirements, and oversight are certainly steps in the right direction.
Unfortunately, that is not enough.
The experience of states such as Virginia – home to the nation’s largest concentration of data centers – has already demonstrate the consequences: escalating energy demand, increasing water consumption, stressed infrastructure, higher electric costs, and growing community opposition.
These are statewide challenges, yet decisions are often left to individual municipalities.
Local planning and zoning boards are designed to evaluate site-specific development proposals – not projects with regional impacts on our shared water supplies, electric reliability, transmission infrastructure, and utility costs. No single municipality can fully assess the cumulative impact of dozens of data centers spread across New Jersey.
New Jersey should establish a temporary statewide Data Center Planning Board or centralized review authority before additional projects move forward.
Such a body could:
• Evaluate statewide water availability and long-term sustainability.
• Assess cumulative impacts on the electric grid and ratepayers.
• Coordinate infrastructure planning across municipalities.
• Develop consistent statewide siting standards.
• Ensure that local decisions reflect regional environmental and utility impacts – not just the merits of an individual application.
Data centers are not ordinary commercial developments. Their impacts extend far beyond municipal boundaries and will shape New Jersey’s water resources, energy infrastructure, and utility costs for decades.
The state must put safeguards in place before irreversible commitments are made – not after.
We urge Gov. Sherrill and the Legislature to establish a temporary centralized authority to oversee the siting and approval of data centers across New Jersey. By taking a coordinated, statewide approach now, New Jersey can encourage technological innovation while protecting its water resources, electric grid, ratepayers, and communities from unintended long-term consequences.
Kin Gee, Holmdel, is president of CHARGE, Consumers Helping Affect Regulation of Gas & Electric
This article originally appeared in the July 16-22, 2026 print edition of The Two River Times.
