California lawmakers have begun a year showing that they are ready to get tough conditions in their data centers, aiming to protect the environment and electricity bill payers. Nine months later, they rarely show it for it.
Of the four datacenter bills in play, two never cut it off from Congress. This includes what data centers need to publicize their power usage and other data centers that provided incentives to use more clean energy.
The other two are located in Gov. Gavin Newsom’s Desk, but have been significantly reduced. It requires data center operators to disclose water use, but it is now a method that could eliminate public access. Another originally intended to protect energy customers from the infrastructure costs driven by data centers, but now regulators can understand whether that’s happening or not.
Data centers have the seemingly mundane job of storing and sending internet content. However, the monotonous, almost windowless facility has raised public policy concerns. I’m involved at least one thing every time I see a Tiktok video or shop on Amazon.
In recent years, the demand for artificial intelligence, especially new general purpose systems such as ChatGPT, has led to an increase in such server farms. This means that more water will be cooled to cool the semiconductors used to train and deploy AI models, more power plants and transmission lines will be deployed, and state regulators are increasingly concerned about the stress of reservoirs and potentially high power bills for potentially residential customers.
These concerns are not limited to California. Communities and regulators in several states have moved towards transparency requirements or efficiency standards. In 2024, Michigan enacted a law requiring disclosure of water use, and the Mayor of St. Louis enacted new rules earlier this month.
California has one of the largest concentrations of existing data centers in the world, with more projects underway. Pacific Gas and Electric, the state’s largest electricity supplier, reported a 40% increase in data center connection requests this spring. In July, the California Public Utilities Commission voted to streamline the data center project application.
Protect your electricity bill
Senate Bill 57, one of the bills with the governor now, allows the state Utilities Commission to assess whether data centers load shift costs to other customers, such as tenants and homeowners.
Initially, the bill from Democratic Sen. Steve Padilla of Chula Vista called for protections like the ones that were recently approved in Oregon and Ohio, preventing data center costs from being passed on to households.
However, the amendment bill by the Congressional Budget Committee in late August was changed to eliminate the special wage structure for data centers. The committee will also evaluate how data centers shift costs to rate payers, effectively granting utility commissions that they already have. Commission officials told Calmatters, where they use their power.
The change has exacerbated at least one early supporter of the bill. The Utility Reform Network was first supported by the proposal for protecting small businesses and housing fee payers. The group believes that the governor needs to sign it into law to track the impact of the data center, but “Unfortunately, data center lobbyists have successfully hampered the bill,” said turn director for turnlace, equity and legislative policy Adria Tinnin. “There’s nothing we can do to actually protect fee payers from the impact of data centers.”
PG&E initially opposed the bill, but withdrew its opposition after the change last month. In August, with support from the California Public Utilities Commission, PG&E adopted rules that require new customers for large projects (two-thirds of which are data centers) to cover the initial costs of the transmission line, rather than passing those costs to rate wages.
Organizations supported by major high-tech companies, such as the Data Center Coalition and Silicon Valley Leadership Group, continue to oppose the bill. They say the state’s Utilities Commission is already evaluating future projects.
Tap on Water Metric
If signed into law, Congressional Bill 93 requires data center operators to share with the water supplier the amount of water they consume when applying or renewing a business license or permit. It also directs state agencies to develop water use efficiency guidelines and best practices for data centers, and to self-certify businesses to comply with them. It was written by Diane Papan, a San Mateo Democrat and chairman of the Congressional Committee on Water, Parks and Wildlife. Last year, the Environmental Group sued Pittsburgh in Bay Area City over the development of its data center, citing water concerns. The community group also raised issues in relation to data centers near the Salton Sea.
The same large tech group fighting consumer cost invoices also say sharing water usage data can leak trade secrets and undermine the company’s competitiveness.
Data center water use is a concern in part as many facilities are located in dry areas and can consume hundreds of thousands of gallons of water a day. A report by Bloomberg shows that around 17 data center projects are planned for California, from Southern California to San Jose in the Bay Area.
A Stanford University survey released in April found that Los Angeles and Northern California rank among some of the most popular locations in the United States for future data center projects, along with drought-hit regions around the high-speed drain Colorado River, such as Phoenix and Las Vegas.
Water concerns were the key reasons behind recent opposition to data centers in Arizona, Georgia, New Mexico, Pennsylvania, Texas and Virginia.
Professor Shaolei Ren, UC Riverside Professor, is a well-known researcher in AI for the environment and public health, said: Google and Openai claim that the model uses a few drops of water per query. Meanwhile, a study in which Ren was co-author concluded that AI can consume about 16 ounces of water at once in a series of queries by a single user.
Ren believes the proposed water regulations will help shed new light on the questions while allowing California’s tech industry to continue to flourish.
But it’s not that simple, said Masheika Earlgood, a Silicon Valley water activist who opposed the San Jose data center project and created an online tool to calculate the water consumption of data centers.
Amendments to the bill have directed data centre operators to share water usage data with water suppliers, not government officials. Allgood has discovered that data center operators and most tech companies have not shared details about the amount of water they consumed from local aquifers, and that water suppliers are not sure. Without such data, it would be more difficult for people against the data center to induce public debate or organize communities.
“I can look up the application. It’s a public record, but I have to give it to the water supplier and I have to go straight to them and ask for this information,” she said. “That’s not transparency for people.”
Linda Gordon, a lawyer and climate researcher at UC Berkeley Human Rights Center, said he supports all sorts of transparency proposals and laws.
In the work in progress, Gordon is working with Allgood on the environmental impact of the data center. She found that access to water usage data has been difficult and that some water agencies refuse to share that data. As Papan’s bill does not clearly address whether data will be made public, it is unclear whether disclosure of the bill will help inform researchers, journalists and communities concerned about data center water consumption.
She hopes that the language of law that requires California’s Department of Water Resources to develop efficiency standards will allow local agencies to develop ways to assess the water use footprint of data centers and whether or not the project should be approved or rejected.
“More disclosures are great, but how that information is used is also important to understand whether it actually makes a difference,” she said.
Johnson writes for Calmatters.
