California passes package of laws tightening AI data center energy and water rules

California Gov. Gavin Newsom has signed a package of seven bills aimed at stopping AI data centers from shifting their utility costs onto residents, as first reported by the Los Angeles Times.

The legislation requires the California Public Utilities Commission to create a new rate classification specifically for data centers. It also forces data center operators to cover the costs of upgrading local electricity grids and water systems.

New disclosure and planning requirements

Other bills in the package require developers of proposed data centers to disclose estimated water use to local governments, along with details on energy efficiency and drought planning. Projects must also meet specific energy, water, and fuel consumption thresholds to qualify for a streamlined approval process.

Last week, Newsom signed a separate executive order to speed up development of an AI "kill switch."

Newsom's statement

In a press release, Newsom said that while the Trump administration pushes toward deregulation, local communities are left dealing with the fallout — rising electricity demand, grid strain, water consumption, and pollution. He said the new laws keep Californians in control and ensure that companies profiting from data centers don't do so at residents' expense.