California Gov. Gavin Newsom signed seven bills Sept. 21 regulating data centers' water and electricity use, according to a statement from his office. The package includes AB 1577, AB 2383, AB 2469, AB 2619, SB 886, SB 887 and SB 1168.
Three of the bills bar utilities from shifting the cost of grid upgrades needed for data centers onto residential ratepayers and order the California Public Utilities Commission to create a separate rate class for data centers, according to the governor's office. Three more require data centers to disclose water use, supply, efficiency and drought planning to local governments and water suppliers, with the data centers themselves paying for any water infrastructure upgrades. A seventh bill removes data centers' blanket exemption from state environmental review.
"With these laws, we are ensuring that Californians remain in the driver's seat, and that those profiting from data centers aren't doing so at our expense," Newsom said in the statement. The signing reverses his position from last year, when he vetoed a water disclosure bill over concerns that regulation could slow AI development, CalMatters reported.
CalMatters reported that a May Gallup poll found seven in 10 Americans oppose data center construction in their communities, and hundreds of cities nationwide have passed bans or blocked projects following local pushback. Data Center Coalition director Khara Boender said the industry shares "the goal of ensuring growth" is responsible but warned the new rules could hurt California's competitiveness, CalMatters reported.
Grid upgrades, water infrastructure and environmental review were previously costs a data center operator could treat as somebody else's problem. California just made all three the operator's own line item, and that changes the math on where the next one gets built.