Electrical corporations: data centers: report.

Senator Padilla's legislation authorizes the California Public Utilities Commission to examine whether electrical costs associated with data center power consumption are being disproportionately shifted to other utility customers. The measure establishes a framework for analyzing both procurement expenses tied to growing data center energy demands and infrastructure investments needed to serve these facilities.

The Commission would evaluate multiple cost factors, including expenses for new transmission and distribution assets, potential stranded asset risks if facilities cease operations, and opportunities to prevent substantial cost transfers between customer classes. Under the bill's provisions, the Commission must complete this assessment and submit findings to legislative policy committees by January 1, 2027, while also posting the analysis publicly on its website. The authorization expires January 1, 2031.

The legislation comes as California grapples with rapidly expanding power requirements from artificial intelligence and large-format data centers. According to the bill's findings, these facilities can support grid efficiency through increased utilization of existing assets and broader distribution of fixed costs. However, the findings also note that without proper oversight, accelerating data center development could impact the state's climate goals and potentially burden existing customers with stranded infrastructure costs.