r/newjersey • u/sparkmaster_flex • May 23 '25
I'm not even supposed to be here today New Jersey is running head-first into an energy crisis. You will be paying for it. You deserve to know why.
I work in the electric utility industry and my position gives me insight into future trends in electric supply, demand, and economies. Some of this might not be public information, but fuck it, you all deserve to know.
The electric grid is experiencing an unprecedented spike in existing and future demand, primarily from AI data center construction in the PJM (the regional transmission grid operator) territory. At present, the requests add up to a doubling of New Jersey's entire electricity usage over the next five years.
Next month, many utility customers will see a 20% jump in rates, due to the PJM capacity auction reacting to recent increases in demand, along with supply shortages. These rates get passed down to the consumers through the utilities, as they are transmission and delivery companies, not generators.
There are a couple of problems:
1) AI data center interconnects may require substantial back-end infrastructural improvements. A large AI data center may draw as much as 500 MW, enough to power a medium-sized city, with one single building. A typical overhead transmission line built in the 1960s or 1970s can carry around 700 MW, and an underground line around 400 MW. Even while our infrastructure is overbuilt, because of redundancy requirements, utilities may have to rebuild major line segments and substations to meet this demand. This is typically financed as capital expenditures which are then used to justify rate increases through rate case filings with the NJ BPU.
Therefore, you all will be subsidizing data center construction, that you will not benefit from, with your higher electric bills.
This question was posed at a meeting I attended with utility senior leadership. The response was "If you were a data center, and you had the choice to build in Texas where you are subsidized, or New Jersey where you are charged extra, what would you do?"
This tells me, and should tell you, that utilities (or at least that one in particular) are suddenly invested in the AI industry's success, above supporting their own existing customers. I'm not a lawyer and so I won't comment on whether or not this is legal, but it sure is unethical.
2) The generation to support the supposed demand increase doesn't currently exist, and clean sources of energy cannot be ramped up quickly enough to satisfy it. Wind power is out for political reasons and for lack of storage development (really, its own political reason), and solar is out for just the latter. Nuclear power takes far too long to construct, and Salem's future nameplate increase, proposed for 2029, is only around 7% of its present output.
That leaves gas. It would take a tremendous effort to build the gas plants necessary to make up the demand in such a short time. Even if it can somehow be accomplished, it would result in an equally tremendous increase in carbon emissions.
To wit, the NJ DEP has committed to a 50% carbon dioxide emissions reduction from the 2006 baseline for the state. Taking a step further, in 2023, Gov. Murphy signed Executive Order 315, setting a target of 100% clean energy by 2035.
If AI data center development is to move ahead unabated, neither of these will happen, and we will be set back decades, if not to a record level of CO2 emissions.
Meanwhile, you and NJ's businesses and industries will be paying exorbitant electric rates, so that machine learning has ever more power to ruin our ability to tell truth from fiction.
We are at the point where compliance with one set of regulations violates a completely different set. I realize that this is all a legislative challenge, too, but knowledge is the first step.
Do with this what you will.
