California Law Requires Data Center Energy Report by 2027

California legislative efforts to regulate the energy usage and costs of data centers resulted in a weakened law requiring the California Public Utilities Commission to produce a report on the industry's impacts by 2027. The original measure, introduced by State Senator Steve Padilla, sought to establish separate electricity rates for data centers to prevent cost increases for households and small businesses.

Other stripped provisions included mandates for 100% carbon-free electricity by 2030 and the required installation of large batteries to support the grid. These measures were blocked by opposition from Big Tech companies and business groups, such as the Silicon Valley Leadership Group and the Data Center Coalition, who warned that stricter regulations would drive jobs and investment to other states.

Gavin Newsom, the Governor of California, further stifled the regulatory push by vetoing a separate bill that would have required data centers to report their water usage. Despite these setbacks, Senator Padilla and Assemblymember Rebecca Bauer-Kahan intend to reintroduce new legislation in 2026 focusing on grid costs and electricity disclosure.