California regulators and policymakers are still grappling with how to address the power needs and environmental impacts being driven by increasingly necessary data centers. A bill under consideration this session looks to collect data on these operations.
Last week, lawmakers discussed the merits of Assembly Bill 1577, also known as the Data Center Energy Accountability Act, which would establish new monthly reporting requirements for the power-hungry and water-thirsty facilities.
While proponents of the legislation call it a necessary step toward getting a handle on the rapidly expanding economic sector, opponents say the bill unfairly singles the industry out — underscoring that no other state imposes the same requirements, which may sound familiar to the state’s fleeing oil and gas sector.
During a hearing before the Assembly’s Committee on Natural Resources last week, Assemblymember Rebecca Bauer-Kahan, D-Orinda, said her legislation was a necessary step toward protecting utility ratepayers while also forcing transparency from data center companies.
“I’m obviously well aware of the GenAI revolution happening, and I’m not here to stop it or prevent it, as you will hear from the opposition,” the lawmaker said, “but we do need to know what the demands on our grid are going to be so that we can build up the energy infrastructure to meet that need and ensure that the costs aren’t being borne by ratepayers.”
In addition to supplying the state Energy Commission with this data, the legislation would also mandate that local planning authorities be informed of power and water use estimates during the permitting process for new centers, a move Bauer-Kahan said is necessary for local authorities to make informed decisions about the projects.
“We all know that the cost of energy is one of the top concerns for Californians right now and so this very simple bill, that merely requires transparency, is one way to start to address it,” she said.
Little Hoover Commission Executive Director Ethan Rarick also spoke in support of the bill, saying that it addresses gaps in essential information and adding that regulators currently rely on aggregated energy consumption data that makes it difficult to understand how individual centers interact with the grid.
“Better data, more data, would allow the state to plan responsibly for the rapid expansion of data centers while protecting communities, the electricity grid and ratepayers,” he said.
Opponents, however, call the legislation duplicative and a threat to mid-sized operations with limited resources and staffing, that simultaneously ignores other power-hungry industries.
“AB1577 singles out data centers for monthly reporting of granular metrics that go beyond understanding load growth and efficiency standards that are not applied to other large energy users,” said Khara Boender, the Data Center Coalition’s senior manager of state policy.
“Isolating one end user fails to provide a holistic view of the load coming onto the grid. Data centers are just one part of a massive demand surge that includes EV adoption and industrial electrification.”
Boender added that there are already “robust mechanisms” in place to track this information without creating a “parallel and potentially conflicting track that adds cost without providing tangible benefits for long-term grid planning.”
Silicon Valley Leadership Group CEO Ahmad Thomas also voiced opposition to the bill, saying that it singles out one of the state’s fastest-growing sectors with a punitive reporting regime.
“California is already a high-cost environment for data center development,” Thomas said. “Our member companies are investing billions in the state in capital, jobs, clean energy procurement, and in-grid reliability, but AB 1577, stacked on top of the other six data center bills proposed, sends a cumulative signal that California intends to single out this industry for regulation that exists nowhere else in the country.”
The broad definition of “data center” in the legislation could mean that mid-sized operations with limited resources would be held to the same requirements as their much larger counterparts.
What’s more, the California Public Utilities Commission has not yet published its report on ratepayer impacts that was mandated under Senate Bill 57. Those findings are expected in January 2027.
“Data center operators would be required to report monthly across more than a dozen energy categories, plus water consumption, water usage effectiveness, and sound levels measured at the property boundary. No other energy or water-intensive industry in California faces anything comparable,” Thomas said.
As of April 21, the bill was re-referred to the Committee on Appropriations.
Legislators Weigh New Reporting Requirements for Data Centers
A bill known as the Data Center Energy Accountability Act would enact new standards for data centers in California. Supporters say it’s a step toward holding these facilities accountable, but opponents say the proposed law is duplicative and threatens smaller operations.
