California tightens rules on AI data center energy and water use
Gavin Newsom signed a package of bills requiring AI data centers to pay for upgrades to the local energy grid.
byEmma Roth Sep 21, 2026, 4:29 PM EDT
California Gov. Gavin Newsom has signed seven bills designed to prevent AI data centers from passing utility costs onto residents, as reported earlier by the Los Angeles Times. The package of laws requires the California Public Utilities Commission to introduce a new rate classification for data centers while forcing them to pay for upgrades to local power grids and water systems.
Other bills included in the package will require proposed data centers to disclose their estimated water use to local governments, along with information about energy efficiency and drought planning. They must also meet certain energy, water, and fuel consumption requirements before qualifying for a streamlined approval process. Last week, Newsom signed an executive order to speed up the creation of an AI “kill switch.”
“While the Trump administration moves toward deregulation, communities are left to deal with the consequences — higher electricity demand, grid constraints, water use, and pollution,” Newsom says in the press release. “With these laws, we are ensuring that Californians remain in the driver’s seat — and that those profiting from data centers aren’t doing so at our expense.”
