California Governor Gavin Newsom has signed seven bills designed to increase transparency and prevent AI data centers from shifting utility costs onto residential ratepayers. The legislation requires the California Public Utilities Commission to implement a new rate classification for data centers and mandates that these facilities pay for necessary upgrades to local power grids and water systems.
Data CentersPolicyGavin Newsom
California Governor Signs Laws Requiring AI Data Centers to Pay for Grid and Water Upgrades
Under the new laws, proposed data centers must disclose estimated water usage, energy efficiency, and drought planning information to local governments. To qualify for streamlined judicial approval processes, facilities must demonstrate compliance with specific state standards regarding energy, water, and fuel consumption.
In a press release, Newsom stated that the laws aim to ensure Californians "remain in the driver's seat" and that the economic benefits of innovation do not come at the expense of local communities dealing with increased electricity demand and water constraints. The legislative package includes several specific bills, such as AB 2383 regarding electricity and AB 2469 and AB 2619 concerning water use disclosures.
Sources
- California tightens rules on AI data center energy and water use （The Verge AI, 2026-09-21）
- California Governor's Office