AI data centers won’t have to disclose water use in California

Gov. Gavin Newsom vetoed legislation that would have required data centers to report how much water they use.

New data centers are rapidly proliferating in California and other Western states, as the rise of artificial intelligence and growing investments in cloud computing drive a construction boom. The centers, filled with equipment, generate a lot of heat and can use large amounts of water to cool their servers and interiors. Many companies don’t reveal how much they use.

Assembly Bill 93, introduced by Assemblymember Diane Papan (D-San Mateo), would have required new data centers to disclose their expected water usage when applying for a business license and would have required all to report their water usage annually.

In a message explaining his decision Saturday, Newsom said widespread adoption of AI is “driving unprecedented demand for data center capacity across the country.”

“As the global epicenter of the technology sector, California is well-positioned to support the development of this critically important digital infrastructure in the state,” Newsom wrote. “I am reluctant to impose rigid reporting requirements on the operational details of this sector without understanding the full impact of their technology on businesses and consumers.”

The bill faced opposition from business groups, including the Data Center Coalition.

Much of the data center construction boom is taking place in arid states, including California, Arizona and Texas, where pressures on water are mounting amid drought and rising temperatures.

Papan said the bill was “a reasonable and transparent approach to understanding and managing the massive demand for water driven by AI” and that she would continue to try to “strike the right balance between technological innovation and sustainable resource management.”

In other water news, Newsom signed off:

• Senate Bill 72which requires the Department of Water Resources to set long-term water goals, including, within 15 years, having “additional water, water conservation, or water storage capacity” totaling 9 million acre-feet, or nearly three times the water used annually in six Southern California counties. Newsom said in his signing message that going forward, the state agency will need to “analyze current and future trends in water needs” when updating California’s water plan.
• Senate Bill 31, a bill intended to help the state address worsening droughts and the effects of climate change by increasing the use of recycled water. Introduced by Sen. Jerry McNerney (D-Pleasanton), it relaxes rules to allow parks to use more reclaimed water and ensure that homeowners’ associations don’t have to lay new pipes if they want to use it.
• Assembly Bill 1466 allows courts in groundwater disputes to issue judgments separately for owners of wells that pump small amounts of water. Assemblyman Gregg Hart (D-Santa Barbara), sponsor of the bill, said it would strengthen California’s efforts on groundwater sustainability and protect “small family farmers facing costly litigation.”
• Senate Bill 394 aims to combat water theft by allowing local agencies to crack down on those who steal from hydrants with increased fines and new enforcement powers. The bill was introduced by Sen. Ben Allen (D-Santa Monica) and supported by the Las Virgenes Municipal Water District and the Assn. California Water Agencies. Las Virgenes, which supplies about 70,000 customers in Agoura Hills, Calabasas and other communities, said it has lost about 45 million gallons of water in recent years to theft from fire hydrants. Supporters of the bill said theft had reached a point where thieves were stealing for commercial purposes, including construction, landscaping or agriculture. They now face an initial fine of $2,500, and up to $10,000 for repeat offenses.