California will require all new data center projects to disclose their potential environmental impacts and find ways to mitigate them under a new law signed by Gov. Gavin Newsom.
Senate Bill 887 was part of a slate of new regulations Newsom approved Monday targeting California’s data center industry. The governor signed a total of seven bills, including ones mandating that data centers pay for their electrical infrastructure and chip in to help prevent wildfires. Newsom called the legislative package “the most comprehensive data center protections in America.”
SB 887 was spurred in part by community opposition to plans for a giant data center complex in the Imperial Valley. The project’s developer tried to design it to match local zoning codes and therefore avoid an environmental review.
That strategy raised concerns for State Sen. Steve Padilla, whose district includes the Imperial Valley. The Democratic lawmaker argued county officials should not allow the project to move forward without meaningful public input. Eventually, he introduced SB 887 in response.
“Big Tech keeps promising to be good neighbors, and these laws now make those promises legally enforceable,” Padilla said in a statement Monday.
The bill’s supporters included close to a dozen environmental organizations and consumer advocates. A number of Imperial Valley organizations, including the Brawley Chamber of Commerce and the Heber Public Utility District, also supported the legislation.
Data center industry groups had opposed the bill, arguing that it unfairly singled out their sector and would drive developers away from California.
“This is a targeted carve-out that treats one technology use differently from similar high-tech industrial projects,” said Ahmad Thomas, chief executive officer of the Silicon Valley Leadership Group, at a legislative hearing in March.
Specifically, SB 887 clarifies that all new data centers are subject to an environmental review under the California Environmental Quality Act, or CEQA.
For most construction projects in California, this is a standard process. It means conducting an in-depth analysis of how the project could hurt the environment and what steps the developer could take to avoid or make up for those impacts.
CEQA reviews also include disclosing those findings to the public and giving people a chance to weigh in. Any individual or group can object or sue to stop a project from moving forward if they believe the environmental study didn’t go far enough.
Certain projects, though, can get approved without going through CEQA. That includes “ministerial” projects, which means they already meet local zoning requirements.
For almost two years now, Imperial Valley data center developer Sebastian Rucci has argued his project should qualify as ministerial. He said he designed the project that way to avoid lengthy environmental analysis or lawsuits.
County officials initially sided with Rucci, clearing the way for the project. But the City of Imperial sued, and a judge recently ruled that the project was not ministerial.
Other data center developers had more success. In Northern California, Amazon is in the process of building a $2 billion data center in the city of Gilroy. The company spent years negotiating with city staff behind the scenes and was able to begin construction with little public input.
Under SB 887, that route will no longer be available to future developers, according to a state legislative analysis.
The new law does offer data center developers an alternative, streamlined path to construction.
To get that benefit, developers must commit to certain strict environmental standards, including switching to entirely renewable energy within five years, using water-efficient cooling systems and signing local community benefit agreements.
In exchange, developers would get access to faster judicial review if they face environmental lawsuits.
Industry groups, though, have argued those requirements are unrealistic for developers to meet.
Khara Boender, a spokesperson for the Data Center Coalition, called the requirements “virtually impossible” during a state Senate hearing earlier this year.
Newsom on Monday also signed a second bill authored by Padilla, which requires state regulators to come up with new rules that will protect the public from shouldering the cost of data centers’ energy needs.
