Newsom signs 7 data center bills as California ramps up regulations
Governor Gavin Newsom signed seven data center bills into law in California, enhancing regulations to address the industry's environmental and economic impacts. The legislation mandates data centers to cover increasing electricity costs and report water usage to local governments. This move aims to protect ratepayers and the environment amidst the state's growing data center sector.
California Governor Gavin Newsom has signed seven data center bills into law, marking a significant effort to regulate the rapidly expanding industry within the state. The legislation aims to bolster protections for ratepayers and the environment, requiring data centers to bear their share of rising electricity costs and provide water usage data to local governments.
Assemblymember Rick Zbur, D-Los Angeles, author of one of the key bills, AB 2383, emphasized that the goal is to address the potential impacts data centers have on communities, particularly concerning large electricity consumption that can lead to price hikes for other ratepayers. AB 2382 mandates a separate rate structure for data centers and requires long-term contracts with security to prevent ratepayers from being burdened if data centers close down. This legislative action follows a November 2025 report by the University of California, Riverside, and Next10, which highlighted a nearly doubled electricity demand, water usage, and carbon emissions from data centers between 2020 and 2025, largely due to the rise of artificial intelligence.
The California Energy Commission supports these new laws, stating they strike a balance between encouraging data center growth and upholding California's environmental protection values while safeguarding consumers from utility bill spikes. However, not all views are in agreement; Spence Purnell, senior fellow of Technology and Innovation at the Washington, D.C.-based R Street Institute, suggested that the legislation could be considered