Major data center bills advance in California despite industry pushback

California lawmakers are pushing two bills meant to keep new data centers from driving up electricity bills for everyone else. Senate Bill 886 would require the state's big utilities to make large data centers (25 megawatts and up) pay the full cost of the power plants and grid upgrades they need, plus a share of fees that fund wildfire prevention and other programs. It would also force these facilities to cut their power draw during grid emergencies, similar to rules being considered in Texas and other states.

The second bill, SB887, offers data centers a faster environmental permitting process if they agree to run on 100% carbon-free electricity within five years, mostly from newly built sources, and use batteries instead of diesel generators for backup power during grid stress. Developers would also have to pay grid connection costs upfront and invest in the communities where they build.

For homeowners, this matters because data centers use huge amounts of electricity, and utilities like PG&E are already planning for a massive increase in demand over the next decade. Supporters argue these bills prevent that cost from landing on regular ratepayers' bills, while PG&E and the data center industry warn the rules could slow down projects or raise costs elsewhere. Both bills are expected to pass the legislature this month, and Governor Newsom has until the end of September to decide whether to sign them into law.