California tightens datacenter rules on water and power

California Governor Gavin Newsom on Monday signed seven state bills that require datacenter operators to report more info about their operations, and to involve communities as they plan future facilities.

The California Assembly Bills (AB) and Senate Bills (SB) signed by Newsom require greater disclosure of datacenter water and electricity use, address who pays for grid connections and other power infrastructure, and introduce rules covering electricity rates, water resources, and environmental review.

They include: California state senator Steve Padilla, who authored two of the bills, said the bills will ensure that datacenters pay for energy grid connection, for electricity generation costs, and for a larger share of wildfire mitigation and liability costs.

The governor's office cited the Trump administration's dismissal of Americans' concerns about AI and datacenters to emphasize Newsom's willingness to constrain an industry of major significance to California's economy.

"While the Trump administration moves toward deregulation, communities are left to deal with the consequences — higher electricity demand, grid constraints, water use, and pollution," said Newsom in a statement.

"Today we are once again laying the groundwork for a stronger approach, because we know that we don’t have to sell out Californians or sacrifice our well-being to innovate and succeed.

California has proven that time and time again." Dr.

Nathan Wangusi, who runs the independent water data transparency platform Data Center Water Leaks, sent a statement to The Register in which he observed that California's new disclosure requirements could improve transparency around how much water datacenters use, help communities understand the bit barns' impact on local water supplies, and protect ratepayers from infrastructure costs.

Much has been said about the need to regulate the safety of AI services, and the environmental impact of the datacenters that host them.

The White House has pushed to accelerate datacenter deployment with executive orders and President Trump has insisted regulation is not necessary.

Yet datacenters have proven unpopular with local communities, who often express concern about water consumption, the potential for increased noise, pollution, and energy prices, plus general unease about AI's effect on labor and society.

According to the National Conference of State Legislatures, 16 states are currently considering whether to ban datacenter construction.

An even larger number of statehouses are exploring some form of datacenter regulation.