Angela E. Juneau Authors Article, "Data Centers and New Jersey’s Energy Crisis: Part 4 - Should We Demand Transparency From Data Centers? Governor Sherrill Says Yes"
As the proliferation of data centers continues to unleash a widespread backlash, a central demand from objectors is increased transparency from data centers. But until recently, New Jersey has been unsure whether, and to what extent, to demand transparency.
Last year the New Jersey Legislature passed an act, S4293/A5548, that would have required data centers to submit quarterly reports with detailed information about their water and energy usage to BPU, all of which would be published on BPU’s website. But in October, former Governor Phil Murphy rejected the act in a conditional veto, stating that P.L. 2025, c. 98, which already requires BPU to study data centers’ impacts on energy costs, was “a suitable framework” to handle this issue, and he proposed revisions that would “protect potentially proprietary information and address security concerns by ensuring that the information BPU collects from data centers will be considered confidential and not subject to disclosure.”
Governor Murphy’s conditional veto did not go over well. Senator Teresa Ruiz, Senate Majority Leader and a sponsor of the bill, said the revisions would “keep[] critical data hidden from the public,” which “undermines transparency,” “weakens our ability to respond effectively,” and risked delays that could lead to “irreversible impacts.” But the following month, Senator Ruiz introduced S4827, which incorporated Governor Murphy’s concerns; the bill did not make it out of committee.
In February 2026, Senator Ruiz re-introduced her scaled-back bill, which requires data center owners and operators to submit semi-annual water and energy usage reports to BPU. S3379 requires BPU to publish on its website the basic information about a data center’s general water and energy usage, but it renders confidential any information submitted to BPU about a data center’s performance and sustainability metrics and protects such information from OPRA requests. S3379 was passed by the Senate and referred to the Assembly Telecommunications and Utilities Committee. Taylor McFarland of the New Jersey Sierra Club said the bill would allow New Jersey to make “informed, science-based decisions about how to integrate this industry into our state without sacrificing our climate goals or our residents' access to clean water.”
It is striking that when Governor Mikie Sherrill took office, her first two executive orders addressed the energy crisis created in part by data centers. And last week, she doubled down on those orders when she announced a four-part plan to create “guardrails” for data centers. One of the four items was to improve transparency by “starting with requiring reporting on energy and water use so the public has greater visibility into the impact of large-scale facilities.” Governor Sherrill has thus signaled that should S3379 make it to her desk, she will sign it.
New Jersey is not pushing for data center transparency only at the state level. In April 2026, New Jersey Representative LaMonica McIver introduced into Congress the AI Data Center Site Selection Transparency Act of 2026, which would, among other things, require data center developers to disclose to the public the location and estimated resources and environmental impact by no later than 180 days before taking any definitive steps toward development.
Critically, the AI Data Center Site Selection Transparency Act of 2026 would add another level of transparency: prohibiting data centers from using non-disclosure agreements with local governments, which would prevent companies from hiding impacts from communities. In December, Assemblywoman Andrea Katz introduced A6181, which would similarly prohibit data centers from using non-disclosure agreements with local municipalities.
Measures like these are particularly timely in light of the class action lawsuit filed last week by residents of Vineland, New Jersey, against developer Data One for noise pollution caused by its data center. After months of residents complaining about the data center’s constant loud hum, people like Democratic congressional candidate Bayly Winder are upset about how the development process played out locally and asking questions like, “who is benefiting? What are the risks? Where is the independent review? What will the impact be on costs?”
In March, Utah became the first state in the nation to demand data centers publicly disclose their water consumption when it passed HB 76, which requires reporting to begin in July 2026. Like New Jersey’s pending law, Utah’s HB 76 also prevents proprietary information from being released to the public.
As New Jersey builds toward becoming a leader in AI, it must continue grappling with the downstream effects of AI development. Legislators and government agencies need information about data centers’ energy usage to effectively manage the energy crisis. And there is now a groundswell of support, including the Governor herself, for the public accessing that information too.
The information contained in this article is not legal advice and has not been updated to include changes in the law since this article was originally published.
