California Governor Gavin Newsom has signed a series of bills into law intended to protect regular ratepayers from being saddled with the infrastructure and power costs associated with data centers in the state.

In total, the governor signed seven bills into law. Three of the bills address cost allocation and seek to shift electric infrastructure costs from residential ratepayers to data center operators. They include SB 1168, which requires data centers to absorb the cost of their energy use and any utility infrastructure upgrades their demand requires; SB 886, which directs the California Public Utilities Commission to create new power rates for data centers to cover grid connection and electricity costs; and AB 2383, which is a companion measure on the same cost-shifting principle. The new rate classes will impact facilities with a capacity of 25MW or more.

Three of the bills concern data center disclosure rules. They include AB 1577, which directs the California Energy Commission to establish a registry process for data center operators' electric infrastructure costs away from residential ratepayers and onto data center operators; AB 2619, which requires data center operators to report water use information under penalty of perjury; and AB 2469, which requires disclosure of estimated water use when applying for or renewing a business license, and makes operators financially responsible for new infrastructure needed.

The reporting mandate to the CEC excludes any facility with electrical capacity below 10MW. This was raised from an original 500kW threshold during committee.

The final bill, SB 887, is environmentally focused and removes data centers' eligibility for blanket environmental review exemptions, while offering fast-tracked approval for facilities meeting state water and energy conservation standards.

“While the Trump administration moves toward deregulation, communities are left to deal with the consequences — higher electricity demand, grid constraints, water use, and pollution. Today we are once again laying the groundwork for a stronger approach, because we know that we don’t have to sell out Californians or sacrifice our well-being to innovate and succeed. California has proven that time and time again,” said the governor.

“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.”

Democrat members of the state legislature authored all the bills. AB 1577 was authored by assemblymember Rebecca Bauer-Kahan (D-Orinda); AB 2383, from assemblymember Rick Chavez Zbur (D-Hollywood); AB 2469 and AB 2619, were both authored by assemblymember Diane Papan (D-San Mateo); SB 886 was authored by senators Steve Padilla (D-San Diego) and Jerry McNerney (D-Pleasanton); SB 887, was also authored by Padilla; and SB 1168, from McNerney.

The package is one of the most comprehensive efforts by a state government to target the data center sector. Several other states have seen new rate classes and energy reporting rules come into force over recent years. Ohio, Oregon, Virginia, New Jersey, Oklahoma, Florida, and North Carolina, to name a few, have all passed or enacted large load rate classes for new data centers