Checks on AI data centers closer to reality in California

California lawmakers are taking significant steps to regulate the data center boom with two new bills, SB 886 and SB 887, introduced by state Sen. Steve Padilla (D-San Diego). The legislation aims to address the vast energy and water consumption of AI data centers, which are driving up costs for consumers and causing environmental and public health concerns across the state. SB 886, known as the California Technology Innovation and Ratepayer Protection Act, would mandate a tariff for data center customers to protect energy consumers from bearing increased costs. SB 887 seeks to bring data center projects under the California Environmental Quality Act (CEQA) for environmental review, while also offering a fast-track option for developers who meet high environmental standards, such as using recycled water and avoiding fossil fuels. Both bills have successfully advanced through their respective Senate committees, building on Senator Padilla's previous legislative efforts. The Little Hoover Commission, an independent oversight agency, recently supported such measures in a report outlining 15 recommendations, including tariffs and pollution limits. Despite opposition from groups like the Data Center Coalition and Silicon Valley Leadership Group, who cite concerns about potential litigation delays, Padilla emphasizes the mutual benefits of the proposed legislation. The push for these statewide regulations is fueled by active community opposition to data center developments. Monterey Park City Council, for instance, has already enacted a temporary moratorium, with voters set to consider a permanent ban. In Imperial County, a proposed hyper-scale AI data center near residential areas and schools faces a lawsuit challenging its exemption from CEQA, despite the developer, Sebastian Rucci, arguing it's on industrially zoned land. Senator Padilla has corresponded with the Imperial County Board of Supervisors regarding this project and the lack of answers to community questions, underscoring the ongoing legal and public participation disputes.