New Jersey Governor Phil Murphy has conditionally vetoed Senate Bill 4293, which would have required data centers in the state to report quarterly information about their energy and water usage. Instead, the governor is proposing revisions that fold these requirements into an existing law, P.L.2025, c.98, which already directs the Board of Public Utilities (BPU) to study the energy impacts of data centers.
“I commend the sponsors for seeking to better understand the impacts of data centers on our energy and water supply,” Murphy wrote in his message to the legislature. “Generative artificial intelligence is a fast-developing industry, and while that development brings exciting possibilities to our state, we must always take seriously our responsibility to manage our resources to support a sustainable and affordable future.”
Under Murphy’s proposed changes, the BPU study would expand to include data center water usage and assess its impact on local water resources. The study would also determine whether data centers should face ongoing reporting requirements similar to those for large commercial buildings, which currently must benchmark energy and water use under state law.
The revised legislation would further direct the BPU and the New Jersey Economic Development Authority to evaluate both the costs and benefits of data centers—including their economic and technological contributions—while protecting proprietary information by keeping facility-level data confidential.
Murphy’s proposal also extends the timeline for the BPU to collect data and issue its findings, aiming to “streamline related efforts to evaluate the impacts of data centers on state and regional resources.”
If adopted, the changes would mark one of the first coordinated state efforts in the U.S. to study how data centers’ growing water and energy demands intersect with infrastructure and sustainability planning.
