California Governor Newsom signed a comprehensive seven-bill package targeting data center energy efficiency, water consumption, and community impact, tightening operational standards.

California Governor Gavin Newsom has signed seven bills into law designed to protect residential ratepayers from infrastructure and power costs associated with data centers in the state.

Three bills address cost allocation and shift electric infrastructure costs from residential ratepayers to data center operators. SB 1168 requires data centers to absorb the cost of their energy use and any utility infrastructure upgrades their demand requires. SB 886 directs the California Public Utilities Commission to establish new power rates for data centers covering grid connection and electricity costs. AB 2383 is a companion measure implementing the same cost-shifting principle. The new rate classes will apply to facilities with capacity of 25MW or greater.

Three additional bills establish data center disclosure requirements. AB 1577 directs the California Energy Commission to establish a registry process for data center operators' electric infrastructure costs. AB 2619 requires data center operators to report water use information under penalty of perjury. AB 2469 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 excludes facilities with electrical capacity below 10MW, a threshold raised from an original 500kW during committee review.

The final bill, SB 887, removes data centers' eligibility for blanket environmental review exemptions while offering expedited 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," the governor said. "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. 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."

All bills were authored by Democratic members of the state legislature. AB 1577 was authored by Assemblymember Rebecca Bauer-Kahan (D-Orinda); AB 2383 by Assemblymember Rick Chavez Zbur (D-Hollywood); AB 2469 and AB 2619 by Assemblymember Diane Papan (D-San Mateo); SB 886 by Senators Steve Padilla (D-San Diego) and Jerry McNerney (D-Pleasanton); SB 887 by Senator Padilla; and SB 1168 by Senator McNerney.

This package represents one of the most comprehensive state-level efforts to regulate the data center sector. Several other states have enacted similar measures in recent years. Ohio, Oregon, Virginia, New Jersey, Oklahoma, Florida, and North Carolina have all passed large load rate classes for new data centers.