California Senate approves bills to force data centers to foot their own energy bills
The California State Senate has passed two bills, SB 886 and SB 887, aimed at making data centers cover their full electricity infrastructure costs to protect utility ratepayers. The legislation also provides incentives for environmental compliance and accelerated project reviews. Both measures now advance to the State Assembly for further consideration.
The California State Senate has passed a legislative package, consisting of Senate Bill 886 and Senate Bill 887, designed to protect utility ratepayers from the rising electricity costs and environmental impacts associated with the state's expanding data center industry. Authored by Senator Steve Padilla, D-San Diego, the bills passed the upper chamber with significant majorities and are now headed to the State Assembly.
SB 886 mandates that the California Public Utilities Commission establish a special tariff to ensure that the substantial transmission and infrastructure costs for connecting large data centers are fully recovered from the tech companies themselves, rather than being borne by everyday utility customers. This measure seeks to codify a commitment some tech giants have made voluntarily to fund their own grid infrastructure.
SB 887 offers an incentive for data center developers through Environmental Leadership Development Project certification, which allows for accelerated environmental reviews. To qualify, projects must meet stringent criteria regarding water conservation, clean energy utilization, and full infrastructure funding, while remaining subject to the California Environmental Quality Act. The legislative package has garnered support from ratepayer and environmental advocates, including The Utility Reform Network (TURN) and Net-Zero California, who argue it provides a sustainable path for tech development in the state without exacerbating energy affordability issues or jeopardizing greenhouse gas reduction targets.