Governor Signs Nation's Strongest Data Center Ratepayer Protections Into Law

AB 2383 ensures data centers pay their fair share of grid costs while protecting California households and businesses from unfair cost shifts

SACRAMENTO, CA - Assemblymember Rick Chavez Zbur (D-Hollywood) today celebrated Governor Gavin Newsom's signing of Assembly Bill 2383, the Fair Share in Energy Act, establishing strong new protections to prevent the substantial electricity and infrastructure costs associated with data centers from being shifted onto California households, small businesses, and other electricity customers.

AB 2383, authored by Assemblymember Zbur, was signed as part of a broader package of data center legislation that includes SB 886, authored by Senator Steve Padilla (D-San Diego) and SB 1186, authored by Senator Jerry McNerney (D-Pleasanton). Together, the new laws establish comprehensive protections for California electricity customers while supporting the continued growth of the state's innovation economy.

"As artificial intelligence and other emerging technologies grow rapidly, California needs to make sure our laws keep pace and that working families and small businesses are protected," said Assemblymember Rick Chavez Zbur (D-Hollywood). "AB 2383 puts ratepayers first by ensuring data centers pay their fair share of the costs needed to serve their enormous energy demands, rather than shifting those costs onto California households and businesses. I'm grateful to Governor Newsom for signing this important legislation and helping us establish a responsible framework that protects ratepayers while planning for the future of our electrical grid."

The rapid growth of artificial intelligence and cloud computing is driving proposals for new data centers across California and the country. These facilities can require enormous amounts of electricity and significant new investments in the electrical grid, making it increasingly important for California to establish clear rules for how they are served and how those costs are allocated.

Together, the new laws will help ensure that data centers:

1. Pay for electric grid upgrades triggered by their operations;
2. Are responsible for the electricity costs necessary to meet their large demand;
3. Pay a fair share of wildfire mitigation, wildfire liability, electrification and environmental programs, and other societal costs; and
4. Are incentivized to add onsite clean energy resources to support grid reliability and sustainability.

The new laws provide greater certainty for ratepayers, utilities, and data centers as California plans for growing electricity demand. The framework will also support long-term grid reliability and California's clean energy and climate goals.

Assemblymember Rick Chavez Zbur serves as the Democratic Caucus Chair for the California State Assembly and represents the 51st Assembly District, which includes Universal City, Hollywood, Hancock Park, West Hollywood, Beverly Hills, Westwood, West Los Angeles, Santa Monica, and other portions of Los Angeles.

CONTACT: Vienna Montague, (916) 319-2051, [email protected]