Responding to mounting concerns about data centers’ strain on local water supplies and electrical grids, the California Legislature approved two transparency measures, Assembly Bill 93 and Senate Bill 57, intended to bring transparency to resource use without imposing immediate operational limits. While early proposals envisioned statewide consumption caps, the enacted versions primarily require disclosure and coordination rather than direct regulation. Both bills reflect a political compromise between environmental advocates and technology industry groups that warned strict limits could drive projects out of California.

Key Provisions of AB 93 (2025)

AB 93 establishes new water-use disclosure requirements for data centers and mandates the Department of Water Resources and the State Energy Resources Conservation and Development Commission to develop guidelines and best practices to maximize the use of natural resources to address the developing and emerging needs of technology in California by 2028. The bill otherwise focuses on transparency and early engagement with water suppliers rather than direct operational limits. A few key provisions include:

• Pre-application disclosure: Before applying for an initial business license, permit, or equivalent local authorization, a data-center owner or operator must provide its water supplier with an estimate of expected water use, and must certify under penalty of perjury in the local application that the estimate was submitted.
• Renewal-stage reporting: Upon renewal of a business license or equivalent instrument, the operator must self-certify under penalty of perjury that it has reported its annual water use to supplier.

These requirements apply to facilities as provided in the statute, i.e., facilities that house computing infrastructure, including graphics and central processing units, servers, storage devices, networking equipment, and associated power and cooling systems for the primary purpose of processing, storing, or distributing electronic data. This extends to all cities, including charter cities, as a matter of statewide concern.

AB 93 was vetoed by Governor Newsom on October 11th, 2025.

Key Provisions of SB 57 (2025)

SB 57 requires the California Public Utilities Commission (“CPUC”) to examine whether the rapid growth of data-center electricity demand could shift costs onto other ratepayers. The measure directs the CPUC to complete and publicly release an assessment by January 1, 2027.

Under the statute, the CPUC’s assessment must:

• Evaluate procurement and grid-upgrade costs associated with large data-center loads;
• Identify strategies to mitigate any substantial cost shifts, if identified.

The CPUC must submit the assessment to relevant legislative policy committees and publish it online. The statute sunsets January 1, 2031, unless renewed by the Legislature.

Implications for Data Center Developers and Operators

Taken together, AB 93 and SB 57 represented California’s first coordinated effort to quantify the resource footprint of data-center development across both energy and water systems. While AB 93 was vetoed, we may see another attempt to regulate water usage by data centers.

SB 57 was signed into law by Governor Newsom on October 11th, 2025.