Governor Newsom signs bundle of data center regulations
Governor Gavin Newsom has signed seven bills into law to regulate California's data center industry. These new regulations address electricity costs, require water usage disclosure, and modify environmental review processes under CEQA. The legislation aims to provide local governments with more information on data center impacts.
Governor Gavin Newsom signed seven bills into law on Monday, establishing new regulations for California's rapidly expanding data center industry. The legislation, enacted statewide, addresses critical issues including electricity grid management, water consumption, and environmental review processes. Assembly Bill 1577 mandates a registry for data center operators, while Assembly Bills 2383 and Senate Bills 886 and 1168 aim to prevent the cost of serving large data centers from burdening other ratepayers by clarifying how infrastructure and power costs are allocated.
In terms of environmental and resource impact, Assembly Bills 2469 and 2619 introduce stricter disclosure requirements for water usage. Developers are now required to provide detailed information on projected water demand, supply, and efficiency measures as a prerequisite for local project approval. Furthermore, Senate Bill 887 significantly alters how data centers are assessed under the California Environmental Quality Act (CEQA). This law establishes a statewide definition for data centers and renders most private data center projects ineligible for CEQA’s "categorical exemptions," which previously allowed projects presumed to have minor environmental effects to bypass full review.
Despite these increased regulations, SB 887 also outlines a pathway for certain projects to receive expedited judicial review if they meet specific additional criteria. These include shouldering their grid-interconnection costs, utilizing recycled water, implementing water-efficient or waterless cooling technologies, and adhering to clean-energy standards. Newsom's office stated that these seven new laws are designed to empower local governments and communities with greater transparency regarding the electricity, water, and land-use implications of proposed data center developments as growth accelerates across the state. The statewide rules come as local jurisdictions like Richmond and Oakland are independently exploring their own responses to data center growth, with Richmond having already implemented a temporary moratorium and Oakland considering a similar measure.