In one of his final acts in office, former Gov. Phil Murphy "pocket-vetoed” legislation, opposed by NJBIA, that would have allowed large-load energy users such as data centers to be charged tariffs to compensate other utility customers.
A New Jersey governor leaving office who still has legislation on his desk can either sign bills, veto them outright, or leave office without acting on them, which is called a pocket veto.
Murphy, whose last day in office was Tuesday, chose to pocket veto A-5462/S-4307, which would have directed the New Jersey Board of Public Utilities to establish a tariff for large-load energy users of more than 100 megawatts monthly, which includes data centers.
NJBIA opposed the bill as a misguided attempt to protect utility customers from rate increases. The reality is that the bill would have only discouraged the construction of data centers in New Jersey, along with the economic activity and jobs the businesses bring.
Deputy Chief Government Affairs Officer Ray Cantor noted that data centers located anywhere in the 13-state PJM region, which includes New Jersey, impact the entire region’s energy capacity market. Therefore, a New Jersey law that uses tariffs to discourage construction of data centers here harms only the state’s economy, while the AI infrastructure gets built in surrounding states and continues to affect all ratepayers in the PJM region.
“We fully understand the sponsor's concerns with recent rate increases, in part due to the demand created by data centers in the PJM region,” Cantor said. “However, we believe the answer to the capacity issues is not to discourage new demand, and thus economic growth, but to encourage the development of more generation to accommodate that growth.”
