California Governor Newsom's Stance on Data Center Regulation Tested by New Bills, Local Bans
California Governor Gavin Newsom faces renewed pressure to regulate data centers amidst growing public opposition and advancing state legislation. While Newsom previously vetoed a bill requiring water usage estimates, new bills are progressing, aiming to increase transparency and mitigate environmental impacts. Locally, Monterey Park has banned data centers, and Imperial County has enacted a moratorium and is being sued by the city of Imperial over a data center project's environmental exemption.
California Governor Gavin Newsom is at a political crossroads regarding data center regulation, facing increased public and legislative pressure despite his previous veto of a bill requiring water usage estimates from proposed data centers. Opposition to these facilities, driven by concerns over immense water and power consumption, land use, and fossil fuel emissions, has intensified across the state and nation.
Several bills are progressing through the California Legislature, including Sen. Steve Padilla's SB 886, which proposes a corporate tariff for data center-related grid upgrades, and SB 887, which seeks to prevent data centers from receiving California Environmental Quality Act (CEQA) exemptions. Additionally, Assemblymember Diane Papan's AB 2619 would mandate water usage estimates under penalty of perjury, and Assemblymember Rebecca Bauer-Kahan's AB 1577 would require monthly reporting of water and fuel consumption to a state commission. These measures highlight a shift in the regulatory landscape, especially as the Environmental Protection Agency has indicated a lack of federal environmental requirements for the industry, leaving it to states like California to set precedents.
The public backlash against data centers is evident, with a recent Gallup poll showing significant opposition to their construction in local areas. Monterey Park, in the San Gabriel Valley, recently became the first city in the nation to ban data centers by public vote. In Imperial County, where a 950,000-square-foot data center project faces fierce opposition, the county board of supervisors enacted a 45-day moratorium on new data centers. The City of Imperial has also filed a lawsuit against the county, arguing that the proposed project should not have received a CEQA exemption, with the San Diego Chapter of the Sierra Club joining the legal challenge.
Political analysts, including Megan Mullin of UCLA and Dan Schnur of UC Berkeley and USC, note that Newsom is in a delicate position. While he has historically aligned with the tech industry, a significant donor base, he must also consider growing voter concerns. Experts like Ben Green from the University of Michigan emphasize that reporting requirements are a minimum regulation, suggesting a struggle between industry lobbying and public demands for greater oversight of data centers' impacts on communities, utility costs, and the environment, particularly as Newsom may be eyeing a presidential bid in 2028.