Newsom Signs Seven Bills Forcing California Data Centers to Disclose Water and Power Use

Gov. Gavin Newsom signed seven bills on Monday that will force California data centers to disclose how much water and electricity they use, and to pay a bigger share of the cost of connecting to the power grid. It is a sharp reversal from a year ago, when Newsom vetoed a similar water-disclosure bill over concerns that regulation would slow AI growth.

The governor’s office is calling the package the “most comprehensive data center laws in the nation.” CalMatters reports that lawmakers and environmental advocates behind the bills say growing public backlash against data center construction is what pushed the package through this year, despite a flood of lobbying money from Big Tech and other business interests trying to soften it.

The seven bills split into three groups. Three shift electricity costs away from residential ratepayers: Senate Bill 1168 (Sen. Jerry McNerney, D-Pleasanton), Senate Bill 886 (Sen. Steve Padilla, D-San Diego, with McNerney) and Assembly Bill 2383 (Assemblymember Rick Chavez Zbur, D-Hollywood) direct the California Public Utilities Commission to set separate power rates for data centers, so operators pay their own grid-connection costs instead of passing them on to everyone else. AB 2383 also pushes data centers toward more renewable energy.

Three more bills require disclosure. Assembly Bill 2469 and Assembly Bill 2619, both from Assemblymember Diane Papan (D-San Mateo), require data centers to report their water use, supply, efficiency and drought planning to local governments and water suppliers; AB 2469 also makes operators responsible for the cost of any water-system upgrades their projects require. Assembly Bill 1577, from Assemblymember Rebecca Bauer-Kahan (D-Orinda), requires monthly reporting on data centers’ energy consumption.

The seventh bill, Senate Bill 887 (Padilla), strips data centers of the blanket exemptions they previously held under the California Environmental Quality Act. Operators now have to show a project will not shift costs onto ratepayers and will meet state energy, water and fuel standards before it can qualify for any streamlined judicial review.

The administration’s own release drew an explicit contrast with the federal government’s approach, opening by noting that the signing comes as President Trump dismisses Americans’ concerns about data centers in their communities. The contrast lands just days after Trump himself called AI extinction warnings a “hoax” while announcing plans for a new “AI Force.” Newsom, in a separate quoted statement, said: “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.”

The disclosure requirements target a problem researchers say has made data centers nearly impossible to study. “It’s extremely frustrating to try to understand basic information,” Mark Specht, senior manager for the climate and energy program at the Union of Concerned Scientists, told The Verge. “There’s a lot of hype about data centers right now … It doesn’t help that we just don’t have basic facts about what’s happening with them to try to understand how much of a problem they are.”

Iris Stewart-Frey, a professor of environmental science at Santa Clara University who led a recent study on data centers in water-stressed communities, told The Verge that Newsom’s own veto of a similar water bill last year shows how fast the politics have shifted. “This is in many ways a step in the right direction,” she said. “It’s signaling to the industry that people are paying attention, that lawmakers are paying attention.” She added: “The whole AI wave is not a force of nature, it’s not a hurricane. This is something that we can actually regulate.”

Assemblymember Papan, who authored two of the bills, described that shift to CalMatters this way: “When you’re looking down the barrel of public outcry that says we don’t want [data centers] at all, and you’ve got localities that are saying they’re going to ban them, then you know the atmosphere has changed.” A Gallup poll published in May found 71 percent of Americans oppose a data center being built in their area, and a July poll from the Public Policy Institute of California found similar opposition statewide. Hundreds of cities nationwide, including Monterey Park and the Bay Area city of Pittsburg, have either banned data centers outright or walked back approvals after public pushback, according to CalMatters.

The industry pushed back on the package. The Data Center Coalition, whose members include Google, Microsoft and OpenAI, warned that further regulation could drive the industry out of California; the group’s own figures put its 2024 contribution to the state at 665,500 jobs, more than $159 billion in economic activity and $14.1 billion in taxes. Khara Boender, the coalition’s director of government affairs for the western U.S., told CalMatters the industry “shares the goal of ensuring growth of this critical infrastructure is responsible and well managed,” but that more work is needed “to promote responsible data center growth while maintaining California as a key, competitive market in the global economy.” Arnab Pal, executive director of the clean-energy nonprofit Deploy Action, was more receptive to the new laws but said the fight is not over. “I don’t think these bills are the end of this fight,” he told CalMatters. “I think we’re gonna have to do a lot of implementation on the back end …”

The new reporting requirements are set to start phasing in next year. California joins a growing list of governments moving to rein in data centers: Virginia’s governor signed his own executive order to rein in data centers earlier this month, and a group of former EPA officials warned this month that federal deregulation of data center emissions could cost lives, a split between state and federal approaches that California’s new laws now sit squarely on one side of.