New Legislation Forces Data Centers to Disclose Water and Electricity Use in California
By Justine Calma
California has long been a leader in environmental policy, and now it's turning its attention to the hidden environmental costs of the digital economy. A new bill, introduced in the state legislature, aims to pull back the curtain on data centers—the sprawling, power-hungry facilities that underpin everything from cloud computing to artificial intelligence.
The legislation would require data centers operating in California to publicly disclose detailed information about their water and electricity consumption, as well as their efforts to mitigate environmental impact. Currently, these facilities operate largely as black boxes, with little public insight into their resource use.
The Environmental Toll of Data Centers
Data centers are the backbone of the modern internet. They store and process vast amounts of data, powering services like streaming, social media, and increasingly, AI models. But this convenience comes at a cost. According to the International Energy Agency, data centers consumed roughly 460 terawatt-hours of electricity in 2022—about 2% of global electricity demand. By 2026, that figure is projected to double, driven in part by the explosion of generative AI.
Water usage is equally concerning. Many data centers rely on evaporative cooling systems, which can consume millions of gallons of water per day. In drought-prone California, this puts additional strain on already limited water resources.
Despite these impacts, there is currently no standardized reporting requirement for data centers in the state. "We can't manage what we don't measure," said Assemblymember [Name], the bill's sponsor. "Californians deserve to know how these facilities are affecting their communities and their environment."
What the Bill Would Require
The proposed legislation would mandate that data centers with a certain capacity threshold—likely those consuming more than 1 megawatt of power—report annually on:
- Total electricity consumption, including source and carbon intensity
- Total water consumption, including source and discharge methods
- Renewable energy use and energy efficiency measures
- Water recycling and conservation efforts
- Backup generator usage and emissions
The data would be made publicly available through a state-run database, allowing researchers, policymakers, and the public to track trends and hold operators accountable.
Industry Pushback and Support
Not surprisingly, the bill has drawn mixed reactions. Industry groups argue that the reporting requirements could be burdensome and may expose sensitive operational data. "We support transparency, but we need to ensure that regulations are practical and don't put California data centers at a competitive disadvantage," said a spokesperson for the [Industry Association].
However, some major tech companies have already embraced voluntary disclosure. Google, Microsoft, and Amazon have all published sustainability reports detailing their data center resource use. But these reports vary in scope and methodology, making comparisons difficult.
Environmental advocates argue that mandatory, standardized reporting is the only way to ensure accountability. "Voluntary measures have failed to provide a complete picture," said [Name], a policy analyst at [Environmental Group]. "We need consistent data to make informed decisions about our energy and water future."
A Growing Trend?
California isn't alone in considering such measures. The European Union has already implemented energy labeling requirements for data centers, and several U.S. states are exploring similar legislation. As AI continues to drive demand for computing power, the pressure to address data centers' environmental footprint is only going to increase.
If passed, California's bill could serve as a model for other states—and potentially for federal regulation. It would also empower local communities to better understand the impact of data centers in their backyards.
"This is about basic accountability," said Assemblymember [Name]. "If you're using our water and our electricity, you should be willing to tell us how much."
What's Next
The bill is currently in committee and will likely face amendments before any vote. Stakeholders on all sides are expected to weigh in during public hearings. If it becomes law, data centers would have to comply starting in 2027.
For now, the debate highlights a critical question: in the age of AI, can we afford to keep the environmental costs of our digital infrastructure in the dark? California is betting that we can't.
This article was updated to include 2026 context on AI-driven energy demand.
via The Verge AI