Bill S731 has drawn significant attention in New Jersey’s energy sector. It addresses growing concerns about how large data centers and other high-demand users could drive up electricity costs for average consumers.
The legislation aims to ensure that major energy users bear a proportionate share of infrastructure expenses, preventing subsidies from smaller ratepayers.
Historical Context
This issue has persisted across legislative sessions.
In the 2024-2025 session, comparable proposals appeared as S4307 and A5462. Although A5462 passed both houses, it was pocket vetoed by the Governor in January 2026.
On January 13, 2026, Senator John Burzichelli, along with other Democratic senators, reintroduced the measure as S731.
Initially, the bill focused solely on data centers.
Amendments on February 12, 2026, expanded its scope to all “large load customers,” defined as commercial operations consuming over 100 megawatts monthly.
This development coincides with a rapid increase in data centers in New Jersey, fueled by technology companies’ growing power needs.
Impact on New Jersey Residents
New Jersey households have felt the strain of sharply rising electricity costs. In June 2025, rates jumped 17 to 20 percent across major utilities, adding more than $20 to the average monthly bill. That increase followed a more than 33 percent rise between June 2023 and June 2025 — and a 55 percent climb in bills from 2020 to 2025.
New Jersey’s residential rates already run about 20 percent above the national average, leaving typical monthly bills between roughly $140 and $200 depending on the provider.
Much of this pressure traces to the regional PJM grid, where data centers have driven capacity auction prices nearly tenfold — from $28.92 per megawatt-day in 2022 to $329 in 2025. Experts attribute 63 percent of the 2024 price surge, and over 70 percent of projected demand in the 2025-2026 auction, directly to data centers. As a result, ordinary families and small businesses have been subsidizing billions in new infrastructure for these facilities.
Bill S731 would directly address this burden by requiring large users to cover their full costs. By shifting expenses away from residential ratepayers and preventing future subsidies, the bill could help stabilize or lower bills for New Jersey families at a time when unchecked growth risks even steeper increases.
And it is clear NJ residents have had enough! In New Brunswick, they put up a great fight against data centers – and won!
Bill Details
The bill requires electric utilities to establish specialized tariffs for large load customers, eliminating subsidies from other users.
Utilities, such as PSE&G, must submit plans to the Board of Public Utilities within 180 days of enactment.
Core requirements include allocating all related costs like transmission and distribution directly to these customers.
It also safeguards against stranded costs if operations cease prematurely and promotes efficiency measures, such as waste heat recovery. New large load customers must provide financial assurances covering 85 percent of their projected needs for 10 years.
They are required to demonstrate project uniqueness, with deposits or bonds to protect others from potential shortfalls.
Sponsors are Senators Burzichelli, McKeon, Turner, Beach, Moriarty, and Diegnan. A companion bill, A796, advances in the Assembly. Both are at second reading, representing approximately 25 percent progress.
Future Expectations
Upon passage, the bill would take effect immediately, with tariffs implemented within one year.
Technology companies may oppose it, claiming it hinders expansion. Proponents argue it promotes equity, avoiding burdens on residential users from corporate demands.
In the long term, S731 could influence similar policies elsewhere, amid rising AI and data requirements. The outcome may become clear by summer 2026.
