U.S. Rep Frank Pallone backs national moratorium on AI data centers

New Jersey congressman says communities and ratepayers should not bear the costs of the rapidly expanding AI industry

U.S. Rep. Frank Pallone Jr. called Wednesday for a nationwide moratorium on new data centers, arguing that their rapid growth is driving up electricity demand, straining the power grid, and increasing costs for consumers.

Speaking during a House Energy and Commerce Committee subcommittee markup on the impact of AI data centers on the electric grid, Pallone said Congress should halt new development until safeguards are in place to protect air and water quality and prevent higher utility bills.

“This simply cannot continue,” Pallone said. “That is why I am in favor of a national AI data center moratorium until we can find a way to ensure they don’t harm our nation’s air, water, and power bills.”

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Pallone, the ranking Democrat on the committee, cited estimates showing that data center electricity consumption doubled between 2017 and 2023 and could account for more than 15% of total U.S. electricity demand by 2030.

The congressman pointed to growing opposition to data center projects in New Jersey, including efforts by local officials and residents in Asbury Park, Red Bank, Old Bridge, Sayreville, and New Brunswick to halt or restrict development.

“Towns in my district are way ahead of this Congress in seeking a moratorium,” Pallone said of the Sixth Congressional District, noting that New Brunswick abandoned a proposed data center project after community opposition.

While supporting legislation intended to reduce the impact of data centers, Pallone said Congress must take stronger action to hold developers accountable and protect consumers from rising energy costs.

Pallone’s call comes amid growing opposition to data center development nationwide as concerns mount over the facilities’ enormous electricity and water demands. Data centers, particularly those supporting artificial intelligence applications, can consume as much power as small cities and have become a focal point in debates over rising electric rates, grid reliability, and climate policy. Residents across New Jersey have raised concerns about energy consumption, environmental impacts, and compatibility with surrounding neighborhoods.

Environmental groups and consumer advocates have also called for stronger state oversight. Earlier this year, Food & Water Watch and dozens of allied organizations urged Gov. Mikie Sherrill and state lawmakers to impose a three-year moratorium on large data centers, arguing that New Jersey should first evaluate the industry’s effects on electricity demand, greenhouse gas emissions, water resources, and utility bills.

The New York Legislature passed a bill in early June establishing a one-year statewide pause on permits for new, large-scale (hyperscale) data centers over 20 megawatts while the state evaluates environmental and grid impacts. New York Governor Kathy Hochul has not yet signed the data center moratorium bill, known as the Responsible Data Center Development Act.

At least 11 other states, including Oklahoma, Pennsylvania, South Carolina, and South Dakota, have introduced legislative bills aimed at imposing temporary moratoriums or strict regulatory freezes.