Newsom Signs Seven Data Centre Laws on Power and Water

Governor Gavin Newsom signed seven data centre bills into law on 21 September 2026, his office said, requiring operators to report electricity consumption monthly and to give local governments and water suppliers figures on expected water use, available supply, efficiency measures and drought planning before a project moves forward.

The reach of the package goes well past disclosure. Senate Bill 886 by Senators Steve Padilla and Jerry McNerney, Assembly Bill 2383 by Assemblymember Rick Chavez Zbur and Senate Bill 1168 by McNerney direct the California Public Utilities Commission to build separate electricity rates for data centres, so that the cost of wiring a very large load into the grid sits with the operator rather than with households and small businesses on the same system. AB 2383 also pushes data centres towards procuring new clean supply.

The exemption that disappeared

The sharpest single change is SB 887, also from Padilla. It makes data centres ineligible for categorical exemptions under the California Environmental Quality Act, the 1970 statute that governs environmental review in the state. Under the new law, a project seeking judicial streamlining has to demonstrate first that it will not shift costs to ratepayers and that it meets state standards on energy, water and fuel consumption. AB 2469 by Assemblymember Diane Papan makes operators responsible for the cost of water infrastructure upgrades their sites require, and her AB 2619 adds further water disclosure duties.

What the monthly numbers are for

AB 1577 by Assemblymember Rebecca Bauer-Kahan carries the reporting duty, requiring owners to file specified information with the California Energy Commission. The Senate Judiciary Committee's analysis of the bill, prepared for a hearing on 30 June 2026, argued that regulators need facility-level information to understand how individual sites interact with the grid and affect local reliability. It cited the Commission's own 2026 report, Data Centers and California Electricity Policy, which found that rapid data centre growth has significant implications for grid reliability, infrastructure planning, water use and community health.

The water half of the package is thinner than the electricity half. AB 2619 and AB 2469 attach their disclosure duties to permit and business licence applications, which means a facility reports what it expects to draw once, at the start. A single cool, wet year can therefore stand in for a site's long-run demand, and there is no annual series to show whether consumption is climbing or whether a company is meeting the sustainability targets it has published. Iris Stewart-Frey, a professor of environmental science at Santa Clara University who led a study of data centres in water-stressed Californian communities, told The Verge on 23 September that water providers in every district she contacted had refused to share usage data, citing privacy rules.

Brussels reached for measurement rather than limits in the same week, proposing on 21 September an automatically generated A-to-G efficiency label for every data centre above 500 kW, as Parallax Nexus reported that day. California has arrived at the same instinct from the opposite direction, through ratepayer politics rather than an efficiency directive.

Mark Specht, senior manager for the climate and energy programme at the Union of Concerned Scientists, told The Verge he would not say definitively that data centres have raised electricity costs in California, and that it is possible they have brought them down a little, because the figures to demonstrate either do not exist. That is the honest reading of the seven bills: they are a measuring instrument, not a brake. Nothing here caps load, refuses a site or sets an efficiency floor, and the first reports will arrive only after the build-out they are meant to explain is already under way.