New Jersey's Legislature has unanimously passed the "Power NJ Act" (A4881/ S4296), a significant bill designed to facilitate the construction of new advanced nuclear energy facilities across the state. This move comes as New Jersey seeks to reduce rising electricity costs, partly driven by the rapid growth of data centers. The act directs the Board of Public Utilities, in collaboration with the New Jersey Economic Development Authority, to create a program for planning and establishing these new nuclear plants. It now awaits Governor Mikie Sherrill's signature.
The initiative follows Governor Sherrill's declaration of a state of emergency on utility costs in January, spurred by a reported 17% average increase in household electricity costs from 2024 to 2025. In response, a Nuclear Task Force was established to coordinate efforts for new nuclear generation. The state had previously lifted a decades-old moratorium on building new nuclear plants in April, paving the way for this legislation.
However, the bill faces opposition due to concerns about its potential financial impact on ratepayers. Opponents, such as Dena Mottola-Jaborska of New Jersey Citizen Action, estimate the bill could cost ratepayers up to $6 billion, noting a lack of transparency regarding its fiscal projections. David Pringle of Empower NJ also argues that new nuclear plants, which typically take 10-20 years to become operational, will not address the immediate affordability crisis and could even worsen it. Critics suggest that the costs, particularly from subsidies through certificates purchased by electric distribution companies, should be borne by data centers rather than residential customers.
Currently, New Jersey operates three nuclear reactors in Salem County, all over 40 years old and owned by PSEG, which provide approximately 40% of the state's in-state power generation. The "Power NJ Act" aims to support the construction of at least 1,100 megawatts of new nuclear electricity generation. Lawmakers have expressed concerns that provisions locking in subsidy levels for 40 years could lead to ratepayers overpaying if energy prices decline in the future, suggesting the need for mechanisms to abandon projects if costs become excessive. Some opponents advocate for placing the burden of these costs on AI data centers, whose substantial energy demands are partly blamed for recent rate spikes.
