The governor announced a comprehensive regulatory framework on May 27. Municipalities had already passed seven verified bans. PJM had forecasted 30 gigawatts of new load. And her predecessor had already paid CoreWeave $250 million to build one.

TRENTON, N.J. — The warning arrived in writing last July. PJM Interconnection, the regional grid operator that manages electricity for 65 million people across 13 states including New Jersey, published its capacity auction results for 2026 and 2027. The market cleared at the federal price cap. Peak load demand jumped 5,400 megawatts year-over-year. The operator's own analysts identified the driver: data centers, the massive server farms powering artificial intelligence, were consuming capacity faster than power plants could come online.

Governor Mikie Sherrill announced her response in Trenton on May 27, 2026. Alongside representatives from the Sierra Club and the International Brotherhood of Electrical Workers Local 102, plus State Senator Troy Singleton (D-7th) and other members of the Legislature, Sherrill promised a four-pillar plan: fair-share grid cost rules, transparency requirements, community benefits agreements, and union prevailing wage jobs. "Not on my watch, not on your backs," she said, according to WHYY.

Singleton has introduced the Responsible Data Center Development Act, a legislative framework that parallels Sherrill's executive approach. The plan arrived ten months after PJM's auction, and six months after Sherrill's own Day One executive orders declaring an electricity affordability emergency and directing the Board of Public Utilities to modernize the grid. It arrived six weeks after more than sixty environmental groups sent Sherrill a letter demanding a moratorium on any data center larger than 20 megawatts until stronger regulations were in place. 

And it arrived after at least seven New Jersey municipalities had passed verified ordinances banning or restricting data centers within their borders: Pemberton Township and New Brunswick in February; Phillipsburg and Monroe Township in April; and Andover Township, Millville, and Warren Township in May. Additional towns have moved to restrict data centers, according to MyCentralJersey.

The municipal cascade tells the story faster than the press release. In Monroe Township, the council repealed data centers from a redevelopment plan that had been approved for a different use entirely. In Millville, the city council blocked a 2.6 million square foot facility that would have drawn 1.4 gigawatts—enough to power more than one million homes—and cited "incompatibility with the City's land use planning objectives." In Andover Township, the council banned data centers one week after police forcibly removed a resident, Shane Connolly, from a public meeting where he was protesting a proposed $5 million annual ratable, according to the New Jersey Herald and NJ101.5. 

Sherrill inherited this pressure. She did not create it. The plan she announced is a reaction to a wave that had already broken through municipal zoning codes, court dockets, and living room windows.

The conditions driving that pressure are measurable. PJM's 2026 Load Forecast Report projects summer peak load growth of 3.6 percent annually, with a total increase of 65,733 megawatts by 2036. State Senator Teresa Ruiz (D-29th), the majority leader, cited PJM data in legislative testimony this spring: by 2030, 32 gigawatts of new load will hit the grid, and 30 gigawatts of that will come from data centers. 

The grid operator's Summer 2026 Outlook, published on May 7, forecasts peak demand at 156,400 megawatts against available capacity of 180,200 megawatts. That margin sounds comfortable until you account for the fact that PJM's interconnection queue has received 220,000 megawatts (220 gigawatts) of applications for the next capacity cycle, according to Ascend Analytics, a consulting firm.

The Legislature has been working on the cost question since before Sherrill took office. Senators John Burzichelli D-3rd) and John McKeon (D-27th) introduced S-731, with Assembly members David Bailey (D-3rd) and others sponsoring the parallel A-796. The bills would require electric utilities to develop special tariff rules for data centers drawing 100 megawatts or more, ensuring non-data-center ratepayers do not subsidize the grid upgrades those facilities necessitate. The Assembly passed that bill on March 23, 2026, by a 55-18 vote, with Brian Lipman, the state Rate Counsel, testifying that a $100 million upgrade example would shift cost from ratepayers to the data center payor. Then-Governor Phil Murphy pocket vetoed the predecessor bill, A-5462, in January 2026, letting it die without action. The measure was reintroduced in the new session and is now pending in the Senate.

Murphy also issued a conditional veto on a reporting bill. Senator Ruiz introduced S-4293, requiring data centers to disclose water and electricity use to the Board of Public Utilities. Murphy conditionally vetoed that bill in October 2025, extending reporting deadlines to January 2027 and folding requirements into a two-year BPU study. Ruiz responded that "delaying action by folding this into a two-year study — while keeping critical data hidden from the public — undermines transparency and weakens our ability to respond effectively."

Sherrill's May 27 plan effectively bypasses the legislative stalemate on grid costs by establishing fair-share rules through executive action rather than waiting for the reintroduced S-731/A-796 to clear the Senate

The plan also includes a clean energy mandate, but that mandate contains a structural trap. Senate Bill S680, advanced by the Senate Environment and Energy Committee on March 16, would require data centers to obtain electricity from new zero- or low-emission sources, but only if a majority of PJM states adopt similar requirements. Senate Resolution 18, also adopted March 16, urges all PJM states to do so. 

The risk is that if other PJM states do not adopt comparable requirements, the mandate becomes a relocation incentive rather than an environmental standard. Data center developers could simply move to states with laxer rules while New Jersey still absorbs the regional grid impacts. No comparable legislation has been reported in Pennsylvania, Ohio, or West Virginia as of May 2026.

Ray Cantor, vice president of government affairs for the New Jersey Business and Industry Association, told NJ Spotlight on April 1 that the concept was sound but the threshold needed to be set at 100 megawatts or more. He added that natural gas needed to be included as a "practical" baseline fuel. The NJBIA has not issued a dedicated statement on Sherrill's May 27 plan as of May 30.

The tension between environmental ambition and economic pragmatism runs through every pillar of Sherrill's framework. The community benefits agreements she promised are still being developed; no Department of Community Affairs template or guidelines document has been released as of May 30. 

The transparency requirements Sherrill announced do not close the non-disclosure agreement loophole that has allowed data center developers to negotiate with municipal officials through shell companies, a practice documented by NBC News across fourteen states. The issue would be partially addressed by Assembly Bill A6181, which has been stuck in the Assembly Science Committee since December 2025. The redevelopment loophole under N.J.S.A. 40A:12A-14, which allows municipalities to designate entire towns as "in need of rehabilitation" and bypass standard zoning notice requirements, remains unaddressed.

The prevailing wage requirement that Sherrill announced as a pillar is not a new policy. It applies a law that Governor Murphy signed on February 13, 2026, during his final weeks in office, to data center construction. The International Brotherhood of Electrical Workers Local 102 stood beside Sherrill at the announcement. The union has a material interest in the outcome: data center construction requires massive electrical infrastructure, and the prevailing wage guarantees union labor rates.

The union's presence underscores the political coalition Sherrill is assembling: environmental groups, labor, and ratepayer advocates against an industry that has already embedded itself in the state's economic development architecture. In November 2025, the New Jersey Economic Development Authority approved $250 million in tax credits for CoreWeave, an AI cloud computing company, to build a 250-megawatt facility in Kenilworth. The award came under Murphy's Next New Jersey Program—AI, a $500 million tax credit pool requiring a $100 million minimum investment and 100 new jobs. CoreWeave and Microsoft are founding partners of Princeton University's AI Hub, announced in January 2026, with a $7.5 million CoreWeave investment and a $25 million collaboration agreement with New Jersey AI startups.

In Kenilworth, where the subsidized facility is planned, the municipal planning board canceled a meeting on May 26 for lack of quorum after residents protested with cowbells and whistles, according to WABC and News12. CoreWeave has scheduled a community forum for June.

The plan does not repeal the Next New Jersey Program—AI or claw back the CoreWeave award. It does not resolve the tension between economic development and ratepayer protection. It regulates within that tension.

Peter Chen, a senior policy analyst at New Jersey Policy Perspective, asked the question that hovers over the entire framework: "If AI is a booming industry, and this is an area where companies are throwing hundreds of billions of dollars into AI capital investment, why exactly does the state need to subsidize it?" 

Sherrill's deputy press secretary, Maggie Garbarino, told Inside Climate News in February that the governor "welcomes new opportunities to attract businesses — such as data centers" while supporting "strong policies that do not burden residents with covering additional costs."

The municipal bans suggest that regulation within tension is not enough. In Warren Township, the committee introduced a ban on May 14 after learning that a single data center could consume 3 to 5 million gallons of water per day. The township's ordinance cites the same Kirkwood-Cohansey aquifer that supplies water to more than one million people across southern New Jersey, according to the U.S. Geological Survey and the Pinelands Alliance. 

The New Jersey Department of Environmental Protection issued a Drought Warning on December 5, 2025, that remained active as of May 2026, with the state experiencing below-normal precipitation for 20 of the last 24 months. Data centers consume large amounts of water for cooling. The state is urging voluntary conservation while permitting facilities that draw millions of gallons daily.

In Vineland, the DataOne facility—a 2.4 million square foot, 300-megawatt project which the Sierra Club identifies as having ties to construction firm Northeast Precast—began construction in early 2025. Environmental groups contend that the facility started building before final NJDEP permits were issued. The city council approved a five-year Payment In Lieu Of Taxes (PILOT) agreement on January 27, 2026, with a tax break schedule starting at zero percent in Year One and escalating 20 percent annually to full taxation by Year Six. 

Two neighbors filed a noise lawsuit on May 27, the same day Sherrill announced her plan, claiming the constant industrial humming prevents them from enjoying their homes. DataOne responded that it is operating in full compliance with Vineland's noise ordinance based on inspections by the Cumberland County Health Department. The New Jersey Law Journal noted the lawsuit could test how data centers coexist with residential communities.

Environmental groups and municipal officials say the plan leaves critical gaps unresolved. The $250 million CoreWeave award is grandfathered. The PJM regional trigger means the clean energy mandate may never activate if other states do not follow. The shell company ban remains in committee. The redevelopment loophole remains open. And the towns that have already banned data centers are not waiting for Trenton to catch up.

Sources

· WHYY, "NJ Gov. Sherrill wants data centers to pay for their electricity" (May 27, 2026)

· PJM Interconnection, "2026/2027 Base Residual Auction Results" (July 22, 2025)

· PJM Interconnection, "2026 Load Forecast Report" (2026)

· PJM Interconnection, "Summer 2026 Outlook" (May 7, 2026)

· Executive Order No. 1, State of New Jersey (January 20, 2026)

· Executive Order No. 2, State of New Jersey (January 20, 2026)

· New Jersey Board of Public Utilities, "Request for Information on Executive Order 2" (February 4, 2026)

· New Jersey Board of Public Utilities, "Virtual Power Plant Request for Information" (May 6, 2026)

· NJ.com, "60+ environmental groups urge Sherrill to pause AI data centers" (May 17, 2026)

· Ordinance 10-2026, Pemberton Township (February 20, 2026)

· Ordinance 2026-08, Phillipsburg (April 16, 2026)

· Ordinance O:20-2026, Monroe Township (April 22, 2026)

· Ordinance 48-2026, Millville City (May 19, 2026)

· Andover Township Ordinance (May 12, 2026)

· Warren Township Committee Ordinance (May 14, 2026)

· New Brunswick City Council Ordinance (February 18, 2026)

· MyCentralJersey, "Towns move to ban data centers" (May 28, 2026)

· New Jersey Herald, "Andover Township Committee approves ordinance to ban data centers" (May 12, 2026)

· NJ101.5, "Andover police clash with data center opponent" (May 8, 2026)

· OPRA Machine, The Collins Project request to Andover Township (May 11, 2026)

· Senate Bill S731, New Jersey Legislature (2026)

· Assembly Bill A796, New Jersey Legislature (2026)

· Senate Bill S4293, New Jersey Legislature (2025)

· Senate Bill S680, New Jersey Legislature (2026)

· Senate Resolution 18, New Jersey Legislature (March 16, 2026)

· NJ Spotlight, "Senate panel backs data center clean energy bill" (April 1, 2026)

· New Jersey Monitor, "Murphy conditionally vetoed data center reporting bill" (October 20, 2025)

· Nixon Peabody, "New Jersey Legislature advances data center bills" Legislative Alert (April 9, 2026)

· NJ.com, "5 key bills to regulate NJ data centers" (April 28, 2026)

· Pinelands Alliance, "Redevelopment loophole allows data centers to bypass notice" (April 30, 2026)

· NBC News, "How NDAs keep AI data center details hidden from Americans" (October 28, 2025)

· Assembly Bill A6181, New Jersey Legislature (December 2025)

· New Jersey Prevailing Wage Act, signed February 13, 2026

· New Jersey Economic Development Authority, CEO Tim Sullivan Memorandum, "EDA approves 250M in tax credits for CoreWeave" (November 12, 2025)

· New Jersey Economic Development Authority, "Next New Jersey Program—AI" (2026)

· re-nj.com, "CoreWeave secures 250M tax break for Kenilworth facility" (November 25, 2025)

· WABC, "Kenilworth residents protest data center with cowbells" (May 14, 2026)

· CBS News New York, "Meeting on AI data center in Kenilworth, N.J., called off" (May 26, 2026)

· Inside Climate News, "Amid Affordability Crisis, New Jersey Hands 250 Million Tax Break to Data Center" (February 26, 2026)

· Courier-Post, "Millville bans data centers" (May 20, 2026)

· Ascend Analytics, "Can US Interconnection Queues Survive Data Center-Driven Load Growth?" (May 5, 2026)

· U.S. Geological Survey / Pinelands Alliance, "Kirkwood-Cohansey Aquifer" (2026)

· New Jersey Department of Environmental Protection, "Drought Warning" (December 5, 2025)

· Ordinance 2026-3, Vineland City (January 27, 2026)

· CBS Philadelphia, "Neighbors sue Vineland data center over noise" (May 27, 2026)

· Press of Atlantic City, "Vineland neighbors file noise lawsuit" (May 28, 2026)

· New Jersey Law Journal, "Suit Challenging Vineland Data Center Signals Novel Class Action Strategy" (May 29, 2026)