California Environmental Quality Act: environmental leadership development projects: data centers: geothermal powerplant projects

The law targets data centers’ large electricity and water demands while requiring qualifying projects to avoid shifting grid costs to other utility customers. It also adds geothermal powerplants to a CEQA-streamlining pathway.

What the law does ​

• Defines a data center as a facility primarily used to process, store, or distribute electronic data, including its computing, power, and cooling equipment.
• Bars categorical CEQA exemptions for public approvals of data-center development and operations, except for specified public, research, safety, national-security, publicly owned, and utility facilities.
• Allows the Governor to certify qualifying data centers and geothermal powerplants as environmental leadership development projects.
• Requires qualifying data centers to pay interconnection and grid-investment costs, use water-saving systems, add zero-carbon storage and power, meet clean-electricity targets, and provide enforceable community benefits.
• Requires qualifying data centers and geothermal projects to mitigate greenhouse-gas impacts first through direct reductions, then through local or regional offsets if needed.
• Directs the Office of Land Use and Climate Innovation, with the State Energy Resources Conservation and Development Commission and other necessary state agencies, to set statewide standards for qualifying data centers.

Who it affects ​

• Data-center developers, operators, and applicants seeking public approvals or expedited CEQA review.
• Local lead agencies reviewing data-center and qualifying geothermal-powerplant projects.
• Electric utilities, publicly owned utilities, and their customers.
• Nearby communities and organizations negotiating community-benefits agreements with qualifying data centers.

Context ​

The environmental leadership development-project program operates through January 1, 2034.

Breakdown ​

CEQA Review for Data Centers ​

SB 887 defines “data center” for CEQA purposes and prevents data center development and operation projects from using categorical exemptions from environmental review. As a result, lead agencies must conduct the environmental review otherwise required under CEQA for those projects. The added review duty can create a state-required local program.

Key takeaways

• The bill adds a CEQA-specific definition of “data center.”
• A project to develop and operate a data center cannot receive a categorical exemption from CEQA, as specified by the bill.
• Data center projects must instead undergo the level of CEQA environmental review that applies without a categorical exemption.
• The bill increases lead agencies’ responsibilities for reviewing data center projects and may impose a state-mandated local program.

Data Centers and Geothermal Projects ​

The bill allows qualifying data center projects and geothermal powerplants to be certified as environmental leadership development projects, making them eligible for CEQA streamlining benefits. It directs the Office of Land Use and Climate Innovation to create statewide standards for data centers, working with the state energy commission and other agencies as needed. The bill also applies the existing greenhouse-gas impact calculation and mitigation process to these projects.

Key takeaways

• Qualifying data center projects may receive environmental leadership development project certification from the Governor.
• Qualifying geothermal powerplant projects may also receive this certification from the Governor.
• The Office of Land Use and Climate Innovation must develop uniform statewide standards for data centers to meet the required conditions.
• The office must consult with the State Energy Resources Conservation and Development Commission and other state agencies when necessary.
• Data centers and geothermal powerplants must quantify and mitigate greenhouse-gas emissions under the same process used for specified existing environmental leadership projects.
• The bill adds duties for lead agencies, creating a state-mandated local program.

No State Reimbursement ​

The bill states that the state does not have to reimburse local agencies or school districts for costs caused by this act. It identifies a specified reason why the constitutional reimbursement requirement does not apply.

Key takeaways

• The bill says no state reimbursement is required for costs resulting from this act.
• The bill applies this conclusion to local agencies and school districts.
• The digest does not specify the reason for denying reimbursement in this excerpt.