California’s Data Center Curbs Softened

California’s legislative session began with a promising roar, lawmakers pledging to rein in the ravenous appetites of the state’s burgeoning data center industry.

The ambition was clear: protect precious environmental resources and shield electricity ratepayers from the hidden costs of the digital age.

Nine months later, the roar has largely faded to a whisper, leaving behind a legislative landscape far less formidable than initially envisioned.

Of four proposed bills, two vanished into the legislative ether, while the two that survived to reach Governor Gavin Newsom’s desk arrive in significantly diminished form.

This raises questions about California’s true resolve in confronting the environmental and economic footprint of Big Tech.

These drab, often windowless facilities, which quietly underpin every TikTok scroll and Amazon purchase, have evolved from a mundane necessity into a pressing public policy concern.

The insatiable demand for artificial intelligence, particularly the powerful new general-purpose systems like ChatGPT, has triggered an unprecedented proliferation of these server farms.

This growth, in turn, translates directly into a skyrocketing demand for water to cool overheating semiconductors and a need for more power plants and transmission lines.

This places immense strain on California’s already taxed reservoirs and threatens to inflate power bills for residential customers.

The struggle isn’t unique to the Golden State; communities and regulators across the nation, from Michigan to St. Louis, are grappling with similar challenges, pushing for greater transparency and efficiency standards.

But California, home to one of the world’s largest concentrations of existing data centers and with a surge of new projects on the horizon, finds itself at the epicenter of this digital dilemma.

Pacific Gas and Electric reported a 40 percent jump in data center hookup requests this spring.

Compounding the irony, the California Public Utilities Commission (CPUC) voted in July to streamline data center project applications, a move that seems to contradict the very spirit of legislative oversight.

One of the bills now awaiting gubernatorial signature, Senate Bill 57, initially aimed to erect robust protections for energy customers.

It mirrored measures adopted in Oregon and Ohio to prevent households from shouldering the infrastructure costs driven by data centers.

Authored by Democratic Sen. Steve Padilla, the bill sought to establish a special pay structure for these energy-intensive operations.

Yet, the powerful currents of lobbying proved too strong.

Amendments by the Assembly Appropriations Committee in late August stripped away these critical protections, transforming a mandate into a mere authorization for the CPUC to “assess” whether data center loads shift costs to other customers.

The problem? As critics quickly pointed out, the CPUC already possessed this authority.

Adria Tinnin, director of race, equity, and legislative policy for The Utility Reform Network (TURN), an early supporter of the bill, expressed profound disappointment.

While still urging the governor to sign it for its potential to track impacts, she lamented, “Unfortunately lobbyists for data centers successfully gutted the bill.

It doesn’t allow us to do anything to actually protect ratepayers from the impacts of data centers.”

PG&E, after initially opposing the bill, retracted its opposition once the substantive changes were made, especially following its own August rule requiring new large projects – two-thirds of which are data centers – to cover initial transmission line costs.

Meanwhile, influential Big Tech-backed organizations like the Data Center Coalition and the Silicon Valley Leadership Group continue their opposition, arguing that the CPUC already scrutinizes prospective projects.

The second bill, Assembly Bill 93, tackles the equally contentious issue of water consumption.

Penned by Assemblymember Diane Papan, it requires data center operators to disclose estimated water use to their water suppliers when applying for or renewing permits.

It also directs state agencies to craft water efficiency guidelines.

This seemingly straightforward requirement, however, quickly plunges into murky waters of its own.

Big Tech groups opposing the bill argue that sharing such data could compromise trade secrets and competitive advantage – a familiar refrain whenever transparency is sought.

The concern over water is particularly acute given that many data centers are situated in increasingly arid regions.

From Southern California to the Bay Area, roughly 17 data center projects planned in the state are in areas already experiencing high or extremely high water stress, according to Bloomberg.

A Stanford University study highlighted Los Angeles and Northern California as prime locations for future projects, placing them alongside drought-stricken areas in the fight for dwindling water resources.

University of Virginia assistant professor Lauren Bridges, who tracks data center regulation, notes that water concerns have fueled opposition across multiple states.

“Because we don’t have any information from the industry about specific site usage, it makes it almost impossible to know what’s going on and how it might impact them,” she stated.

The true scale of water consumption by AI systems remains a subject of debate.

While tech giants like Google and OpenAI suggest their models use “only a few drops of water per query,” a study co-authored by UC Riverside professor Shaolei Ren, a leading researcher on AI’s environmental impact, concluded that AI could consume roughly 16 ounces of water in a single series of queries by one user.

Ren believes the proposed regulation will offer much-needed clarity, allowing California’s tech industry to thrive responsibly.

However, for activists like Masheika Allgood, a Silicon Valley water advocate who developed an online tool to calculate data center water consumption, the bill’s “transparency” falls short.

A key amendment directs operators to share data with water suppliers, not directly with government officials or the public.

Allgood, who has struggled to obtain such information directly from tech companies, doubts water suppliers will readily share it, making it harder for concerned communities to spark public discussion or organize.

“That’s not transparency for people,” she asserted.

Linda Gordon, an attorney and climate researcher at the UC Berkeley Human Rights Center, echoed these concerns.

While supporting any legislation that increases transparency, her ongoing work with Allgood reveals the difficulty in accessing water use data, with some water agencies refusing disclosure citing a decade-old court decision.

Without explicit language in AB 93 ensuring public access, it remains uncertain whether the bill will truly empower researchers, journalists, and communities to understand and address data centers’ water footprint.

Gordon hopes that the bill’s requirement for the California Department of Water Resources to develop efficiency standards might, in turn, empower local agencies to better evaluate and approve or deny projects.

California’s legislative journey on data centers serves as a potent reminder of the complex dance between technological advancement, economic growth, and environmental stewardship.

The initial bold steps taken by lawmakers have been met by powerful industry forces, resulting in legislation that, while offering glimmers of progress, largely sidesteps the fundamental questions of true accountability and public access.

The digital future, it seems, will continue to cast a long, and often opaque, shadow over the Golden State’s precious resources.