California Bills on Data-Center Tariffs and Water Reporting Advance in Legislature

Four bills regulating data centers advanced through the California Legislature this month, requiring corporate tariffs for grid upgrades, ending CEQA exemptions, and mandating water- and fuel-use disclosures. Sen. Steve Padilla (D-San Diego) introduced SB 886 to create a corporate tariff covering data-center-related grid-upgrade costs and SB 887 to prohibit ministerial CEQA exemptions for the facilities.

Both measures cleared the Senate without Republican support and moved to the Assembly Utilities and Energy Committee. Assemblymember Diane Papan (D-San Mateo) authored AB 2619, which would require data-center owners to submit, under penalty of perjury, estimates of expected water usage and sources before applying for a business license.

Assemblymember Rebecca Bauer-Kahan (D-Orinda) authored AB 1577, which would require monthly reporting of water and fuel consumption to a state commission.

Both bills passed the Assembly with limited Republican backing and await Senate action. Gov. Gavin Newsom vetoed similar water-usage reporting legislation in October 2025, stating he was “reluctant to impose rigid reporting requirements” without understanding impacts on businesses and consumers.

A 950,000-square-foot data center proposed in Imperial County was exempted from CEQA review by the county. The city of Imperial sued earlier this year, arguing the exemption was improper; the San Diego Chapter of the Sierra Club joined the suit last month. Last week the Imperial County board of supervisors approved a 45-day moratorium on new data centers.

U.S. city to enact such a prohibition by public ballot. A Gallup poll released last month found seven out of ten Americans oppose data centers in their communities.