California Signs New Laws Requiring Data Centers to Disclose Water and Electricity Use

The new rules, which are set to begin next year, will require data center operators to disclose certain details about their resource usage. For instance, Assembly Bill (AB) 1577 requires monthly reporting on energy consumption, while AB 2619 and AB 2469 mandate water disclosures. Notably, AB 2469 also holds operators responsible for covering the costs of infrastructure upgrades required to serve their facilities.

These legislative measures aim to provide scientists and the public with the data needed to assess whether data centers are increasing utility bills for residents or draining limited natural resources. While researchers have previously noted the difficulty of obtaining such information—often citing privacy regulations—the new laws seek to address these gaps.

However, some gaps remain in the reporting requirements. Currently, water disclosures under AB 2619 and AB 2469 are only required during the permit or business license application process, which may not reflect year-to-year fluctuations or long-term consumption trends. Despite these limitations, Iris Stewart-Frey, a professor of environmental science at Santa Clara University, suggested the laws represent a significant step toward regulating the massive infrastructure demands of the AI era.

PLUS ULTRAby Amenoyomi

The impact of data center expansion on electricity bills is not a simple increase in burden, as there are two competing scenarios. In one, the high cost of connecting massive facilities to high-voltage transmission systems and the risk of overbuilding if demand drops could drive up rates for all residents. Conversely, bills could potentially decrease if the fixed costs of grid maintenance are spread across a larger number of customers.

However, these potential savings depend on whether data centers contribute to the costs of the distribution systems that serve smaller, low-voltage customers. Since many large facilities avoid these costs by connecting directly to high-voltage transmission lines, the actual effect on residents' bills remains uncertain without precise consumption data.

Water resources face a similar lack of transparency, particularly in rural and lower-income areas where small water systems are more vulnerable to added demand. Until now, researchers found that water providers often refused to share usage data by citing privacy regulations, leaving the actual strain on these communities hidden from public view.