The other anti-data center movement: California's sky-high electricity prices
California is experiencing an anti-data center movement, with high electricity prices and stringent regulations limiting growth compared to other states. Local communities like Monterey Park have enacted permanent bans, and an Imperial County project was blocked by a moratorium. State legislators are also proposing new bills to address energy and water usage concerns.
California is facing a growing anti-data center sentiment, driven by high industrial electricity prices, long grid connection wait times, and state regulations on backup generators that limit facility size. These factors have largely steered data center development away from California, with much of the demand being serviced by neighboring states like Arizona and Nevada where costs are lower and regulations less stringent.
Despite these barriers, California is still projected to see an 18% increase in data centers, with 51 new facilities planned. This growth is raising concerns among utility ratepayers and environmentalists. Pacific Gas & Electric (PG&E) anticipates a significant increase in demand from data centers, potentially requiring billions in grid upgrades that could impact ratepayers. The Utility Reform Network (TURN) is advocating to shield ratepayers from these costs and is backing new legislative efforts.
State lawmakers are actively proposing bills to regulate data center development. State Sen. Steve Padilla has introduced legislation requiring data centers to pay 100% of new transmission upgrades and at least half of their electricity from new clean energy sources. Other bills from Assemblymembers Rebecca Bauer-Kahan and Diane Papan aim to mandate disclosure of energy and water usage. While similar bills faced setbacks last year, these new proposals highlight ongoing efforts to balance environmental concerns with economic activity, particularly following Monterey Park's popular vote to permanently ban data centers and a moratorium blocking a 330 MW facility in Imperial County.