Electricity: data centers

The law seeks to prevent data centers’ growing power demand from shifting electricity procurement, reliability, wildfire, and related costs onto other customers.

What the law does ​

• Requires electrical corporations to file transmission-and-distribution tariffs that make participating data centers pay a reasonable share of wildfire, electrification, environmental, and other societal-cost obligations.
• Requires electrical corporations to file generation tariffs that support clean-energy procurement and make participating data centers cover their incremental generation costs for at least 10 years.
• Requires payment protections including upfront collateral or prepayment, fees for failed interconnection or early termination, and minimum payments if a data center uses less electricity than projected.
• Allows the California Public Utilities Commission to set the tariff threshold, but not above 25 megawatts of peak demand.
• Requires community choice aggregators and electric service providers to adopt comparable data-center generation tariffs by January 1, 2028.
• Lets eligible data centers reduce generation funding requirements by installing zero-emissions resources behind their meters, as determined by the commission.

Who it affects ​

• Large data centers receiving electricity under the new tariffs.
• Electrical corporations, community choice aggregators, and electric service providers.
• Other retail electricity customers protected from added costs and stranded procurement expenses.
• Publicly funded research, public safety, certain national-security, publicly owned, utility, and specified telecommunications facilities, which are excluded from the electrical-corporation generation tariff.