NJBIA is voicing opposition to a bill that the Assembly Telecommunications and Utilities Committee will consider, which proposes special tariffs on energy used by AI data centers. Ray Cantor, NJBIA Deputy Chief Government Affairs Officer, expressed concerns in his testimony that the legislation, A-5462, would deter the construction of data centers in New Jersey and negatively impact economic activity and job creation.
Cantor acknowledged the sponsor's concerns about recent rate increases due to demand from data centers in the PJM region. However, he argued that discouraging new demand would hinder economic growth. Instead, he suggested encouraging more generation development to support this growth.
He highlighted that data centers across the 13-state PJM region affect energy capacity markets. A New Jersey law imposing tariffs could harm only New Jersey’s economy while neighboring states continue developing AI infrastructure.
Cantor mentioned Pennsylvania's approach to embracing economic development without tariffs. He noted Amazon Web Services' (AWS) recent announcement of a $20 billion investment in Pennsylvania for AI innovation and cloud computing infrastructure expansion. One complex will be near the Susquehanna nuclear plant for power supply.
“While Pennsylvania will benefit from a massive construction and jobs project, we are considering a bill to disincentivize their location in New Jersey,” Cantor stated. He pointed out Pennsylvania's reduced corporate taxes compared to New Jersey's high Corporation Business Tax as factors influencing investment decisions.
The committee voted 5-2 with one abstention to release the bill.
