New Jersey Fines Microsoft-Linked DataOne $1.07 Million for Running 62 Unpermitted Gas Generators

New Jersey's Department of Environmental Protection issued a $1.07 million fine on September 22 against DataOne, the company building an AI data center in Vineland for Nebius, the Amsterdam-based infrastructure firm supplying compute to Microsoft. The NJDEP says it's the largest penalty the state has ever assessed against a data center, and possibly one of the largest in the country, according to Commissioner Ed Potosnak.

The violation: 62 Caterpillar G3516H natural-gas generators, each rated at 1,982 kilowatts, running at the Vineland site without preconstruction permits or operating certificates. That's a combined nameplate capacity of approximately 122.9 megawatts, according to ENR. New Jersey law requires a permit for any generator rated above 37 kilowatts. DataOne had none for any of the 62 units.

Inspectors found the generators during a July 29 site visit. They weren't there in December 2025, when the DEP first inspected the property. The gap got public attention after Floodlight, a nonprofit newsroom working with The Guardian, flew a thermal drone over the site and counted 45 of the 62 generators actually running. TechRadar reports the tip that triggered the investigation came from a local farmer who noticed equipment appearing on the site while photographing a neighboring golf course.

What DataOne says

A DataOne spokesperson told Floodlight and Tom's Hardware the company disagrees with the state's "temporary generator determination" but will apply for the air permits anyway. The company says the generators were meant as interim power while it builds a permanent system around Bloom Energy fuel cells. Under a May 14 agreement, Bloom is installing fuel cells in three phases meant to deliver roughly 250 megawatts of guaranteed capacity and 328 megawatts installed, according to a Nebius securities filing cited by ENR. DataOne has 45 days to submit permit applications and get approvals, or it has to stop running the generators. It also has 20 days to request a hearing.

The bigger project

The Vineland campus covers nearly 588,000 square feet and is designed for 14 data halls with 350 megawatts of combined capacity, according to New Jersey Monitor, cited by NJ Today. Construction is expected to wrap up in December 2026. The facility is tied to Nebius's arrangement to run AI infrastructure for Microsoft through 2031, a deal New Jersey Monitor puts at $17.4 billion. The New York Times, cited by Tom's Hardware, has reported the underlying Nebius-Microsoft arrangement at $33 billion. The two figures likely reflect different scopes of the same deal, and neither source resolves the gap.

This isn't the only permitting fight at the site. Vineland city officials issued stop-work orders last month after crews began building a 1.5-million-gallon liquefied natural gas tank and fuel-cell units before getting permits, according to New Jersey Monitor. Neighbors have also filed a lawsuit over construction noise.

The pushback from both directions

Environmental advocates say the fine doesn't match the scale of the project. Matt Williams of Sustain SJ argued a $1 million penalty "does not affect companies like DataOne" and that the state should have ordered an immediate shutdown rather than a 45-day grace period. Bruce Buckheit, a former EPA air enforcement chief, told Floodlight the generators "violate federal law" and said DataOne is "breathing a sigh of relief at being allowed to continue." The generators were absent during a December inspection but present and running by late July, in an area where nearby residents complained about noise and construction as early as February — and the fine amounts to a flat $1.07 million for a company backed by a multibillion-dollar contract, with no per-unit breakdown provided by the state.

But the state's order isn't a rubber stamp either. DataOne still has to prove it can obtain valid permits within 45 days or shut the equipment down, and the DEP can tack on an additional penalty equal to whatever economic benefit DataOne got from skipping compliance in the first place. Gov. Mikie Sherrill's office has framed the case as justification for a broader regulatory push. Sherrill signed a law in August requiring every data center in the state to report water and electricity use to the Board of Public Utilities every six months, part of a four-pillar plan on energy fairness and community benefit agreements. She has told Politico she opposes a statewide construction moratorium, a position that puts her at odds with groups like Food and Water Watch and the Pinelands Alliance, which are calling for exactly that.

Resident Steve Brown summed up the frustration to the Times: "It's a 'don't ask for permission, just ask for forgiveness later' kind of deal." Fellow Vineland resident Tiffany Leone-Vespa argued the fine should have been assessed per generator rather than as a flat sum. Whether New Jersey's approach — permits within 45 days or shut down — actually forces compliance, or whether DataOne simply absorbs the fine as a cost of getting AI capacity online faster for Microsoft, will depend on what the DEP does if the deadline passes without approved permits.