The package of laws requires data center operators to shoulder more of the costs tied to their operations, rather than passing them along to everyday ratepayers. Three of the bills redirect electric infrastructure expenses away from residential customers and onto the companies building and running these facilities. Another three require data center operators to disclose how much water and other resources their operations consume. The seventh law strips data centers of automatic environmental review exemptions, though it does offer a faster approval path for projects that meet the state’s water and energy conservation benchmarks.

In a statement announcing the signings, Newsom drew a sharp contrast between California’s approach and that of the Trump administration, which has largely encouraged unchecked data center expansion nationwide.

“We know that we don’t have to sell out Californians or sacrifice our well-being to innovate and succeed,” Newsom said. “California has proven that time and time again. 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.”

President Trump, for his part, has been an outspoken champion of rapid data center growth, calling the sector the “oil of the next 20, 25 years” during remarks last week at the All-In Summit, a business leaders’ conference.

The move represents a considerable reversal for Newsom, who last year vetoed a bill that would have required water usage disclosures, citing worries that added regulation might slow the growth of artificial intelligence. At that time, he approved only a single, watered-down measure calling for environmental studies.

Lawmakers and environmental groups say the change in course reflects a surge of public opposition to data center construction that grew too loud to ignore — even as tech companies poured money into lobbying efforts to blunt the legislation.

“When you’re looking down the barrel of public outcry that says we don’t want [data centers] at all, and you’ve got localities that are saying they’re going to ban them, then you know the atmosphere has changed,” said Assemblymember Diane Papan, a San Mateo Democrat who authored two of the bills Newsom signed Monday.

California isn’t alone in this reconsideration. Other state legislatures, along with Congress, are weighing similar restrictions. A Gallup poll from May found that seven in 10 Americans oppose having data centers built in their own communities, while a July survey from the Public Policy Institute of California found comparable resistance among state residents. Across the country, hundreds of cities — including Monterey Park locally and Pittsburg in the Bay Area — have either banned data centers outright or reversed prior approvals after residents pushed back.

Arnab Pal, executive director of the clean-energy nonprofit Deploy Action, called the new laws a meaningful step but said there’s more work ahead to ensure data centers genuinely benefit Californians through grid improvements and clean energy investment.

“I don’t think these bills are the end of this fight; I think we’re gonna have to do a lot of implementation on the back end, and as other states roll out their policies next year, I think California is going to look back and be like, ‘maybe we should have done more,'” Pal said. “I’m interested to see what we do next year on this.”

Industry groups, meanwhile, warn the new rules could drive data center development out of state. The Data Center Coalition — whose members include Google, Microsoft and OpenAI — points to the sector’s economic footprint in California, which it says supported 665,500 jobs, generated more than $159 billion in economic activity, and produced $14.1 billion in combined federal, state and local tax revenue in 2024.

Khara Boender, the coalition’s director of government affairs for the western U.S., said the industry supports responsible growth but cautioned that policymakers need to strike a balance.

“The data center industry shares the goal of ensuring growth of this critical infrastructure is responsible and well managed,” Boender said, adding that more needs to be done “to promote responsible data center growth while maintaining California as a key, competitive market in the global economy.”

The bills Newsom signed include Senate Bill 1168, Senate Bill 886 and Assembly Bill 2383, all aimed at shifting electric infrastructure costs from residential ratepayers to data center operators; Assembly Bills 2469, 1577 and 2619, which require disclosure or estimation of water and other resource usage; and Senate Bill 887, which eliminates blanket environmental review exemptions for data centers while providing expedited approval for projects meeting state conservation standards.

Original source: CalMatters

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Senate Bill 954, authored by Sen. Catherine Blakespear, D-Encinitas, cleared both the Assembly and Senate this week and now awaits the governor’s signature. The measure represents the Legislature’s attempt to correct course after last year’s Senate Bill 131, which exempted so-called “advanced manufacturing facilities” from the California Environmental Quality Act, or CEQA, as part of a deal tied to approval of the state’s $300 billion budget.

That exemption drew swift pushback from more than 30 legislators who warned it was written too broadly and could expose already burdened communities to greater pollution risks. Those lawmakers vowed to revisit the issue this year — a promise SB 954 now fulfills.

The new bill narrows which facilities can skip environmental review and builds in new safeguards for nearby residents. It arrives after months of negotiation and several compromises with industry groups. Environmental advocates describe the final product as an imperfect but workable fix, while business organizations argue the bill still imposes too many restrictions that could stifle manufacturing growth and job creation in California.

Blakespear expressed confidence that Newsom will sign the legislation, saying the changes “ensure that the CEQA exemption for advanced manufacturing is workable” while adding “important protections for air quality, disadvantaged communities and California’s environment in general.”

A local example fueled much of the debate

The push for reform gained urgency after a real-world incident in Orange County. In May, a chemical tank overheated at the GKN Aerospace facility in Garden Grove, forcing evacuation orders for roughly 50,000 nearby residents while crews worked to keep the tank from exploding.

Under last year’s law, a facility like GKN’s would have qualified for the advanced manufacturing exemption, bypassing environmental review altogether. Supporters of SB 954 pointed to that incident as proof that sites located near homes and schools need continued oversight.

“For more than 50 years, CEQA has allowed community members and workers to participate in planning decisions when facilities like these are proposed,” Gabriel Tolson of the Planning and Conservation League told lawmakers during a June Assembly hearing. He noted that CEQA reviews have historically resulted in protective measures such as improved air filtration systems, safer chemical alternatives, and funding to support local emergency responders.

Under the new bill, a facility similar to GKN’s would now be required to undergo environmental review if proposed today, since it sits close to residential neighborhoods and schools. SB 954 blocks the exemption for manufacturing operations located near disadvantaged communities or areas where people live and work. It also limits the exemption to “final-tier” manufacturing — meaning the last stage of production — while excluding companies that produce components containing hazardous substances such as PFAS, chemicals linked to cancer and water contamination. Data centers are excluded from the exemption entirely.

Senate President Pro Tem Mike McGuire, D-Santa Rosa, who helped broker last year’s CEQA reform pledge, said the bill strikes the right balance.

“Eliminating CEQA for heavy industrial projects like mining and chemical manufacturing will not result in economic progress, it will only poison our communities and leave taxpayers footing the bill for generations of clean up,” McGuire said in a statement. “SB 954 will make sure that we develop our manufacturing industry without sacrificing public health and environmental protections.”

Concessions along the way

The bill underwent significant revisions as it moved through the Legislature. After Assembly Appropriations Chair Buffy Wicks, D-Oakland, raised objections, Blakespear removed provisions related to housing, including language that would have required environmental review for housing developments built on habitat for protected species.

Additional changes made on the Assembly floor softened some of the bill’s original requirements. Exempt facilities can now be located in industrially zoned areas generally, rather than only in heavy-industrial zones. The requirement for zero-emission backup power was reduced from 100% to 50%. Facilities now only need to be eligible for LEED certification rather than actually certified. And projects must undergo environmental review if their pollution output exceeds 50% of local air quality standards.

Asha Sharma, deputy director of Sierra Club California, acknowledged the trade-offs involved. “From a policy perspective, Sierra Club California wouldn’t think it’s a good idea for any heavy industrial projects like manufacturing to be getting CEQA exemptions at all,” she said. “But there’s a lot of political considerations. … To make sure that we at least get some level of cleanup to 131 this year, and this was one of the sacrifices that kind of had to be made.”

Business groups say the bill still misses the mark

Industry representatives argue the revisions didn’t go nearly far enough to address their concerns about slowing development in California.

Matt Regan, policy director for the Bay Area Council, said the legislation remains impractical and could hinder job growth, undermine middle-class opportunities, and work against the state’s own clean energy goals.

“We have created an environment in California where manufacturing is all but impossible to do here anymore,” Regan said. He pointed to Anthro Energy, an Alameda-based battery manufacturer that opted to build its first production plant in Kentucky instead of California.

Regan also noted that SB 954 still doesn’t allow commercially zoned land to be converted for advanced manufacturing use — projects must be located on property that was already zoned for industrial use as of Jan. 1, 2026. He called the bill’s air quality and backup power standards unrealistic. “I mean, these are just pie-in-the-sky numbers that have been made up and thrown out there because they know that they’re completely unattainable,” he said.

Lance Hastings, chief executive of the California Manufacturers & Technology Association, criticized the pace of the negotiations, saying his organization had sought dialogue for months without meaningful engagement.

“CMTA has spent months requesting dialogue and meeting with staff, only to see these amendments now, with no opportunity for deliberation,” Hastings said in a statement. “The Legislature’s rush to pass laws that are fraught with imbalance, uncertainty and litigation risk is exactly what led to the passage of SB 131 in the first place, and if lawmakers are troubled by how that bill passed, SB 954 is not the remedy.”

As of now, Newsom has not signaled whether he intends to sign the bill. His office did not respond to questions about his position on the legislation.

Original source: CalMatters

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WASHINGTON (AP) — The Biden administration is restoring federal regulations that require rigorous environmental review of major infrastructure projects such as highways, pipelines and oil wells — including likely impacts on climate change and nearby communities. The longstanding reviews were scaled back by the Trump administration in a bid to fast-track projects and create jobs.

A rule finalized Tuesday will restore key provisions of the National Environmental Policy Act, a bedrock environmental law designed to ensure community safeguards during reviews for a wide range of federal proposals, including roads, bridges and energy projects authorized in the $1 trillion infrastructure law Biden signed last fall, the White House said.

The White House Council on Environmental Quality said the new rule, which takes effect in late May, should resolve challenges created by the Trump-era policy and restore public confidence during environmental reviews.

“Restoring these basic community safeguards will provide regulatory certainty, reduce conflict and help ensure that projects get built right the first time,” said CEQ Chair Brenda Mallory. “Patching these holes in the environmental review process will help projects get built faster, be more resilient and provide greater benefits to people who live nearby.”

Former President Donald Trump overhauled the environmental reviews in 2020 in a bid to accelerate projects he said would boost the economy and provide jobs.

Trump made slashing government regulations a hallmark of his presidency. He and his administration frequently expressed frustration at rules they said unnecessarily slowed approval for interstate oil and gas pipelines and other big projects. The rule change imposed in 2020 restricted the timelines for environmental reviews and public comment and allowed federal officials to disregard a project’s role in cumulative effects, such as climate change.

The new rule comes as the Supreme Court reinstated a separate Trump-era rule that curtails the power of states and Native American tribes to block pipelines and other energy projects that can pollute rivers, streams and other waterways.

In a decision that split the court 5-4 earlier this month, the justices agreed to halt a lower court judge’s order throwing out the Trump rule. The decision does not interfere with the Biden administration’s plan to rewrite the Environmental Protection Agency rule. Work on a revision has begun, but the administration has said a final rule is not expected until next spring. The Trump-era rule will remain in effect in the meantime.

Contrary to frequent assertions by Trump and others in his administration, Mallory said a more rigorous environmental review will actually speed up completion of major projects, since they will be more likely to withstand a legal challenge by environmental groups or states. Many Trump-era environmental decisions were reversed or delayed by courts after findings they did not undergo sufficient analysis.

Environmental groups hailed the rule change, which they said restores bedrock environmental protections under NEPA, a 1970 law that requires the government to accept public comments and take environmental, economic and health impacts into consideration before approving any major project.

“NEPA plays a critical role in keeping our communities and our environment healthy and safe, and Donald Trump’s attempts to weaken NEPA were clearly nothing more than a handout to corporate polluters,″ said Leslie Fields, the Sierra Club’s national director of policy, advocacy and legal affairs.

Environmental groups and African American, Latino and tribal activists had protested the Trump-era rule change, saying it would worsen pollution in areas already reeling from oil refineries, chemical plants and other hazardous sites. The Biden administration has made addressing such environmental justice issues a key priority.

“Communities of color, especially, have relied on NEPA to make sure their voices are heard in decisions that have a profound impact on their health and their well-being,” said Rosalie Winn, a senior attorney for the Environmental Defense Fund, which challenged the Trump-era rule.

The White House action “reestablishes essential NEPA safeguards and ensures they will continue to protect people and communities today and in future generations,‴ she said.

Business groups and Republican lawmakers criticized the rule change, saying it would slow down major infrastructure developments.

“Important projects that address critical issues like improving access to public transit, adding more clean energy to the grid and expanding broadband access are languishing due to continued delays and that must change,″ said Chad Whiteman, vice president for environment and regulatory affairs for the U.S. Chamber of Commerce.

Arkansas Rep. Bruce Westerman, the top Republican on the House Natural Resources Committee, said the White House action would “weaponize NEPA” by making it harder to navigate and more bureaucratic.

“At a time when we should be coalescing around bipartisan ways to lower gas prices, tame skyrocketing inflation and fix the supply chain crisis, President Biden is unfortunately reinstating archaic NEPA regulations that will only result in delays and red tape and feed activist litigation,″ he said.

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