Newsom signs data center bills as state ramps up regulations
California Governor Gavin Newsom signed seven data center bills into law this week, increasing regulations across the state. The legislation aims to protect ratepayers and the environment by requiring data centers to cover higher electricity costs and provide water usage data. This move responds to significant increases in electricity and water consumption driven by the expansion of AI technology and data centers in California.
California Governor Gavin Newsom has signed into law seven bills aimed at bolstering regulations on data centers throughout the state. The legislation focuses on protecting ratepayers and the environment, requiring data centers to contribute their share to rising electricity costs and to provide local governments with data on their water usage.
According to a report from the University of California, Riverside and Next10, electricity demand, water usage, and carbon emissions in California nearly doubled between 2020 and 2025, largely due to the increased demands of artificial intelligence technology. Assemblymember Rick Zbur, D-Los Angeles, author of one of the bills, AB 2382, emphasized that the package of bills ensures data centers bear the true cost of their energy consumption and that ratepayers are protected from price hikes. The California Energy Commission supports this balanced approach, aiming to encourage data center growth while aligning with the state's environmental protection values.
However, some critics, like Spence Purnell of the R Street Institute, view the increased regulations as overreach, arguing that data centers are being unfairly singled out during a critical growth stage for the industry. Despite this, Purnell acknowledged the value of transparency bills, such as SB 1168 and AB 1577, which mandate disclosure of water and environmental impact data.