New Jersey Policy Perspective released a report on Mar. 31 stating that the rapid growth of artificial intelligence data centers has led to a 20 percent increase in electric bills for families and small businesses across New Jersey.
The findings highlight the impact of AI data center expansion on utility costs, air quality, and local economies. The report, titled “Fool’s Gold: The Hidden Costs of AI Data Centers for New Jersey,” says that by 2030, nearly one-tenth of all electricity used in the state will be consumed by these facilities—the same amount needed to power all of Rhode Island.
“New Jersey families are getting hit twice,” said Alex Ambrose, NJPP Senior Policy Analyst and report co-author. “They’re paying more each month to subsidize data center expansion, and they’re breathing dirtier air because these facilities are keeping polluting power plants running. Meanwhile, the companies building these data centers are getting tax breaks and walking away with the profits.”
The report describes several challenges linked to AI data center growth: higher monthly utility bills due to infrastructure upgrades passed onto consumers without protections; increased air pollution in communities already facing environmental burdens; water resource strain; and minimal permanent job creation despite significant state subsidies. According to Ambrose, “The path forward is clear. Stronger rules, cleaner energy, and a commitment to putting people before corporate profits.” In Vineland specifically, a proposed facility plans diesel backup generators in an area where residents have elevated rates of asthma and heart disease.
Despite claims about economic development from new construction projects, the analysis finds that large AI data centers employ only about 50 people after completion—far fewer than other industries such as warehousing. The study also notes states lose substantial revenue through subsidies: Virginia lost $1.6 billion in sales tax revenue while New Jersey’s Next New Jersey program offers up to $500 million in tax credits for similar developments.
New Jersey Policy Perspective advocates for equitable policies addressing racial, social, and economic disparities according to its official website. The organization focuses on advancing economic justice through policy research according to its official website as well as providing analysis on issues affecting residents statewide according to its official website. It also engages policymakers with reports on budgetary matters according to its official website while participating in advocacy efforts throughout New Jersey according to its official website.
