Governor Newsom: Local government should allay data center ‘anxieties’
California Governor Gavin Newsom has detailed his stance on data centers, emphasizing that companies should bear the cost of infrastructure expansion rather than passing it onto ratepayers. He highlighted concerns over data centers' high electricity and water consumption, referencing similar issues and actions in Virginia and Texas. Newsom called on local governments and data companies to address public anxieties related to increased costs.
California Governor Gavin Newsom has offered his most comprehensive remarks to date on data centers, acknowledging the widespread bipartisan criticism they face due to their significant demands for electricity and water. Newsom, who previously vetoed legislation requiring data centers to disclose water usage, asserted that these companies, particularly large "hyperscalers," should be responsible for the costs associated with building additional energy and water infrastructure, rather than burdening ratepayers.
The Governor cited actions in other states, noting that Virginia recently ordered data center operators to contribute more to energy infrastructure development, as data centers account for up to 25% of that state's electrical capacity. He also mentioned Texas Governor Greg Abbott's recent decision to pause approvals for new data centers pending an audit of their electricity consumption. Newsom observed that while California has not seen the same scale of hyperscaler investment, data center projects in locations like Gilroy and Irvine are generating considerable public concern over both electricity and water usage, and he urged local governments and data companies to alleviate these anxieties.