1977 Saturn Street in Monterey Park (File Photo – Je-Show Yang)
Senator Sasha Renée Pérez (D-Pasadena) has introduced SB 978, the Data Center Community Accountability Act, aimed at regulating the rapid expansion of large data centers across California and protecting utility ratepayers, public health, and the environment.
By News Desk
California is home to roughly one-third of the nation’s data centers, and demand is projected to increase significantly in the coming years. In communities such as Monterey Park, this growth has raised strong concerns about impacts on energy use, water resources, pollution, and electricity costs.
“I have heard urgent calls from my constituents, and others throughout the state, to regulate data centers and their impacts on energy, water and pollution,” Senator Pérez said. “SB 978 bans the use of backup diesel generators that emit air pollution, prevents data centers from placing electricity costs onto ratepayers and directs state regulators to assess the impacts of data centers on California’s ability to meet its climate goals.”
The bill focuses in particular on hyperscale data centers, which support large-scale data storage, cloud computing, and artificial intelligence. These facilities consume between 10 and 50 times more electricity per square foot than a typical commercial office building. National estimates project that data center electricity use could double or triple by 2028, potentially accounting for up to 12 percent of total U.S. electricity consumption. Such growth could place major strain on California’s electrical grid and shift billions of dollars in infrastructure costs onto residential and commercial ratepayers.
State agencies and academic researchers have also warned that unregulated data center growth could worsen air quality. Backup diesel generators alone could impose up to $266 million in public health costs by 2028, with emissions that push local air quality beyond health-based standards.
“Energy bills continue to skyrocket in California, especially burdening low-income people. At the same time, clean air remains a pipe dream for environmental justice communities across the state,” said Asha Sharma, State Policy Manager at Leadership Counsel for Justice and Accountability. “It is critical that major energy guzzlers—like data centers—do not increase energy bills for California consumers, while requiring a stop to their pollution of nearby communities with dirty diesel emissions.”
SB 978 would address environmental, community, and workforce concerns by mandating clean backup generation and banning diesel generators; directing the California Energy Commission to report on the impacts of hyperscale data centers on the state’s climate goals; requiring the use of a local, skilled workforce paid at prevailing wages; mandating upfront payment for transmission upgrades needed to serve large facilities; and creating a separate electricity rate class for data centers operating above 75 megawatts.
“This legislation would protect California’s ratepayers from seeing their electricity bills rise due to data centers,” Senator Pérez said. “SB 978 makes California’s position clear: data centers will not be built without strong community oversight, environmental review and fiscal accountability.”
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