"Tools that power artificial intelligence devour energy. But attempts to shield regular Californians from footing the bill in 2025 ended with a law requiring regulators to write a report about the issue by 2027. If that sounds pretty watered down, it is. Efforts to regulate the energy usage of data centers the beating heart of AI ran headlong into Big Tech, business groups and the governor."
"That's not surprising given that California is increasingly dependent on big tech for state revenue: A handful of companies pay upwards of $5 billion just on income tax withholding. The law mandating the report is the lone survivor of last year's push to rein in the data-center industry. Its deadline means the findings won't likely be ready in time for lawmakers to use in 2026."
"The measure began as a plan to give data centers their own electricity rate, shielding households and small businesses from higher bills. It amounts to a toothless measure, directing the utility regulator to study an issue it already has the authority to investigate, said Matthew Freedman, a staff attorney with The Utility Reform Network, a ratepayer advocate. Data centers' enormous electricity demand has pushed them to the center of California's energy debate, and that's why lawmakers and consumer advocates say new regulations matter."
Artificial intelligence infrastructure consumes large amounts of electricity, and attempts to protect households from higher bills in 2025 instead produced a law mandating a report by 2027. Efforts to directly regulate data-center energy usage faced opposition from Big Tech, business groups and the governor. California relies heavily on tech companies for revenue, complicating regulatory action. Data-center electricity requests total 18.7 gigawatts, creating concerns about costly grid upgrades and uncertain long-term planning due to speculative projects and shifting AI loads. The mandated report could influence future policymaking and utility commission decisions on data-center rates and obligations.
Read at www.mercurynews.com
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