California lawmakers are once again pressing Gov. Gavin Newsom to require data centers to come clean about their water consumption, sending him a pair of bills that could reshape how these sprawling facilities are built across the state — including in fast-growing corners of the Inland Empire, where several projects have drawn scrutiny over energy and water demands.
The legislation, both authored by Assemblymember Diane Papan, a San Mateo Democrat, arrives as communities from the desert to the Central Valley grapple with the rapid spread of data centers built to power artificial intelligence. Lawmakers passed Assembly Bill 2469 on Monday, which would prohibit local governments from approving new or expanded data centers unless developers disclose their water usage plans and agree to cover the costs of any necessary water infrastructure, including new pipes, treatment systems or storage.
That bill joins Papan’s Assembly Bill 2619, which cleared the Senate last week on a lopsided 30-9 vote. That measure would require data center operators to report, under penalty of perjury, how much water they expect to use or have used when applying for or renewing business licenses and permits.
Both bills now await Newsom’s signature — or veto. The governor rejected a nearly identical version of the reporting bill last year after intense lobbying from the tech industry, saying he was hesitant to impose “rigid reporting requirements” without a fuller understanding of the impact on businesses and consumers.
Papan said she’s frequently asked whether her second attempt stands a better chance this time around.
“To which I say, the opportunity for leadership has not gone away. If anything, it has been amplified,” she told CalMatters.
Much has changed since last year’s veto. Public unease over data centers has grown sharply, with a recent Public Policy Institute of California survey finding that most residents oppose new facilities in their communities and worry about their environmental toll.
Iris Stewart-Frey, an environmental science professor at Santa Clara University who authored a study this year on the industry’s water disclosure practices, said the backlash reflects both the pace of the industry’s expansion and its habit of operating behind closed doors.
“We currently are seeing a phase of heightened concern because of the rapid evolution of the industry — and the lack of transparency,” Stewart-Frey said. “I think that’s where these bills can really make some progress in getting the sides back to the table and conversation, and also recreate some of this public trust.”
Cities take matters into their own hands
With state oversight largely absent, cities and counties have started acting on their own — often by saying no. Monterey Park voters approved a permanent ban on data centers in June. The Coachella City Council followed suit last week, passing its own ban to applause from residents. Tulare County supervisors have paused new approvals while they consider a longer-term moratorium.
The trend isn’t limited to California. New York recently enacted a yearlong moratorium on new data centers, and a Gallup poll found 70% of Americans oppose the facilities in their communities.
A high-profile dispute over a proposed data center in Gilroy recently drew national attention, something Stewart-Frey said reflects rising public suspicion of an industry that has largely kept its water usage under wraps.
“It’s also emblematic of the fact that the data center industry in California has not been releasing actual water use data, right?” she said. “This lack of transparency is also biting them in the back here.”
Papan said that’s precisely the problem her bills aim to fix.
“I don’t think we should be eliminating anything without sufficient knowledge about what their needs are, and then how can we meet those needs,” she said. Addressing data center developers directly, she added: “Help us help you — because if you go into an area that doesn’t have sufficient water supply for you, it’s not going to work.”
Familiar battle lines, new complications
The debate has drawn the usual opposing camps. Environmental advocates and community groups support the bills as a step toward greater transparency, while tech and business interests are pushing back hard.
Khara Boender, western government affairs director for the Data Center Coalition, said her group worries the legislation unfairly singles out data centers compared with other major industrial and commercial water users. She said any new reporting requirements tied to permits or licenses “should apply to other similar commercial and industrial users, as that would provide context and a holistic view of water demands.”
Adding to the complexity, several influential local government groups — including the League of California Cities, the California State Association of Counties and the Rural County Representatives of California — have come out against AB 2469, arguing in a July letter that it “undermines local governments’ ability to protect and represent their communities through established permitting mechanisms and community engagement processes.”
Most water agencies have stayed on the sidelines, raising only technical concerns. One notable exception is Santa Clara Valley Water District, which serves a region already dense with data centers and has thrown its support behind both bills.
“Despite local efforts to mitigate the impact of data center water demand, more information on water use could help local water agencies, such as Valley Water, plan for actual needs,” Joshua Golka, the district’s state government relations lead, wrote in a letter to Papan.
A step forward, but not a complete fix
Michael Kiparsky, director of the Wheeler Water Institute at UC Berkeley’s Center for Law, Energy & the Environment, described Papan’s bills as “necessary, but not sufficient.”
He warned that even with new water-use data in hand, smaller cities and counties with limited staff and technical expertise may still struggle to evaluate the risks and benefits of hosting a data center. An earlier version of AB 2619 would have directed state agencies to develop guidance for local governments, but that provision was stripped out before the Senate vote.
Papan acknowledged the guidance would have been useful but said it came with a hefty price tag — an Assembly analysis pegged the cost of developing water-use and technology guidelines at $2 million in the first year and $1 million annually thereafter.
“The main goal has been transparency. Let me give you the data, and let’s go from there,” Papan said. “I just didn’t want anything to divert from that main goal.”
Kiparsky argued the state should go further, proposing a dedicated strike team to help smaller communities interpret the new data and a centralized public database so officials, researchers and residents can track the cumulative impact of data centers statewide.
“To be really clear, data centers are not bad or good … we use them every day for just about everything we do involving technology,” Kiparsky said.
The real question, he said, is whether a particular community — given its available land, water and energy resources — is actually a suitable place for one.
“You can’t answer those questions just with what’s required from this bill — you need to have the understanding that comes from experts looking at it,” he said. “The state, in my opinion, can and should provide that.”
Original source: CalMatters
