California tightens rules on AI data center energy and water use

California Gov. Gavin Newsom signed seven bills on September 21, 2026, requiring AI data centers to pay for local power grid and water system upgrades and directing the California Public Utilities Commission to create a new rate classification for data centers so utility costs are not passed onto residents. The laws also require proposed data centers to disclose estimated water use, energy efficiency, and drought planning information to local governments, and to meet certain energy, water, and fuel consumption standards.

California tightens rules on AI data center energy and water use By Emma RothSource: The Verge AI https://www.theverge.com California Gov. Gavin Newsom has signed seven bills https://www.gov.ca.gov/2026/09/21/governor-newsom-signs-most-comprehensive-data-center-laws-in-the-nation-providing-communities-more-control-on-water-electricity-and-land-use/ designed to prevent AI data centers from passing utility costs onto residents, as reported earlier by the Los Angeles Times https://www.latimes.com/california/story/2026-09-21/newsom-signs-bills-to-regulate-data-center-industry-criticizes-trump-for-inaction . The package of laws requires the California Public Utilities Commission to introduce a new rate classification https://www.machinebrief.com/glossary/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 … Get AI news in your inbox Daily digest of what matters in AI.