Data Centers in California

While data centers and the proliferation of AI pose a wide range of potential impacts on the economy, the environment, and society, this fact sheet focuses specifically on the impacts on the state’s electricity system and its ratepayers, along with policy solutions to mitigate those impacts.

If left unaddressed, data center growth could undermine grid reliability, slow the clean energy transition, and raise costs for ratepayers. Policymakers should require data centers to provide more transparency into their operations and pay their fair share of electricity costs. The state should additionally implement guardrails to ensure the growth of data centers does not stall clean energy progress or threaten grid reliability, and that the harmful air quality impacts from backup generation are minimized.