Newsom signs bills to regulate data center industry, criticizes Trump for inaction
California Governor Gavin Newsom signed seven bills to regulate the state's data center industry, focusing on electricity costs, energy efficiency reporting, and water consumption. This action addresses public concerns and widespread local opposition, including moratoriums and bans, against data center developments across the state.
California Governor Gavin Newsom has signed seven bills aimed at regulating the state's rapidly expanding data center industry, marking a significant shift in the state's approach to these facilities. The legislation seeks to address widespread concerns regarding the environmental and economic impacts of data centers, particularly their immense electricity and water consumption. This move follows Newsom's previous veto of similar legislation and reflects a growing public and legislative awareness of the need for stricter oversight.
Among the key measures, Senate Bill 886 and Assembly Bill 2383 will empower the California Public Utilities Commission to establish special requirements and rates for data centers' electricity use, including costs for new power and infrastructure upgrades. Additionally, Assembly Bill 1577 mandates that data centers report their energy usage and efficiency data annually to the California Energy Commission. Two bills by Assemblymember Diane Papan focus on water consumption, requiring operators to disclose estimated water use for permits and barring local approvals without a water assessment and scarcity plan.
These legislative actions come amidst a surge of public opposition across California, where numerous cities and counties have proposed or enacted moratoriums and even outright bans on data center development, such as Monterey Park, Los Angeles County, Imperial County, and Richmond. The Data Center Coalition, an industry advocacy group, has voiced strong opposition to the new bills, asserting that they will create significant uncertainty and make California an unattractive market for data center development, potentially pushing job creation and tax revenue to other states.
While California's data centers are generally smaller than the large AI facilities seen elsewhere, the California Energy Commission projects the state's data center electricity demand to double in the next decade. A Public Policy Institute of California poll indicates 73% of residents oppose new data center construction in their communities, underscoring the pressure on lawmakers to address the industry's impacts.