Newsom Signs Seven Data Center Laws, Ending CEQA Shortcuts and Writing Tariffs Into Statute; Texas Rewrites Home Health Licensing

The bottom line today

A year ago, Gov. Newsom vetoed a data center water reporting bill on the grounds that rigid disclosure rules should wait until the state understood the costs, as this release noted on August 28. On September 21 he signed seven data center bills at once [1]. His office calls them “the most comprehensive data center laws in the nation” [1]. AB 1577 and AB 2619, covered here in August, are among them [1]. So are SB 887, which closes CEQA shortcuts for the industry, and SB 886 and AB 2383, which put data center tariff terms into statute [1, 2, 3, 4]. Each one came with a goal worth taking seriously: keep the cost of serving these facilities off other ratepayers. Several reach that goal by treating one industry differently from every other large customer, and that is the cost California chose this week. In Texas, home health agencies got a licensing rewrite with a cost the state says it cannot measure [7].

CA California SB 887: CEQA applies to every data center

What it does. SB 887, by Sen. Steve Padilla, says that CEQA applies, “notwithstanding any other law,” to entitlements for the development and operation of a data center, and bars categorical exemptions for those projects [2]. In exchange, a data center can be certified as an environmental leadership development project, which brings expedited judicial review, if it meets every condition on a list [2]. The list includes paying the full cost of interconnection and of all grid investments, including new generating capacity, needed to serve it; four hours of zero-carbon storage at 100% of forecast peak demand; recycled water or waterless cooling; 100% zero-carbon power for hourly needs within five years, 75% of it newly developed; a binding community benefits agreement; and the construction labor standards of AB 205 [2]. The Office of Land Use and Climate Innovation writes statewide standards for each condition [2].

Where it stands. Passed the Senate 29-9 and the Assembly 59-11, with Senate concurrence 29-8 on August 31; signed September 21 as Chapter 439 [2].

Pratt’s read. The author’s case, as the Senate analysis records it, is that hyperscale projects are under review in Imperial County, where unemployment is high, and that the bill “incentivizes good neighbor data center development” [2].

The opposition list reads like a directory of California employers: the California Chamber of Commerce, the Bay Area Council, the California Manufacturers & Technology Association, the Silicon Valley Leadership Group, TechNet, the Data Center Coalition and NAIOP [2]. The coalition argued, in the Assembly analysis’s summary, that the bill applies a stricter regime to one industry than to others and sets standards so hard to reach that it would effectively halt data center development in the state [2]. The streamlining offer is real on paper. In practice, a developer must commit to pay for grid capacity, storage and hourly clean power before it knows whether a court will hear the case quickly. The Energy Commission put its own cost at about $1.8 million a year for eight positions [2]. Credit where due: Assembly amendments struck a recurring reporting requirement as a condition of eligibility [2].

CA California SB 886 and AB 2383: data center tariffs by 2028

What they do. Together the two bills create the California Technology Innovation and Ratepayer Protection Act in the Public Utilities Code [3, 4]. SB 886 requires the CPUC, by January 1, 2028, to adopt new tariffs or update electric rules for data centers above a size threshold it sets, no higher than 25 megawatts, and to prevent stranded costs or cost shifts to other customers [3]. Its transmission interconnection tariff assigns all transmission upgrade costs to the data center, caps refunds of those payments at 75% of annual transmission revenue from the customer, imposes an early termination fee on any data center that leaves within 10 years or fails to ramp up, and requires a prevailing wage and skilled-and-trained workforce certification [3]. It applies to new transmission interconnection agreements signed on or after January 1, 2027 [3]. AB 2383, by Assemblymember Rick Chavez Zbur, adds transmission, distribution and generation tariffs, with cost recovery so utilities can sign 10-year supply contracts without leaving unpaid costs behind, and requires community choice aggregators to adopt their own generation tariffs by January 1, 2028 [4].

Where they stand. SB 886 passed the Assembly 62-7 and won Senate concurrence 28-10 on August 31; AB 2383 passed the Senate 28-9 and the Assembly concurred 67-2 [3, 4]. Both were signed September 21, as Chapters 438 and 435 [3, 4].

Pratt’s read. The principle here is cost causation, and this release has credited it before. The author of SB 886 cites estimates that rates could rise 8% without protections, and says Microsoft, Meta and Anthropic have already committed to pay for interconnection [3].

The problem is where the terms live. The Senate analysis notes that the CPUC already has a PG&E transmission interconnection proceeding and a rate design rulemaking underway, and that the bill “may require the CPUC to revise its decisions” [3]. The California Chamber of Commerce put it this way: “Rather than letting the CPUC develop a record, the bill dictates terms” [4]. A 10-year exit fee and a 75% refund cap in statute are hard to adjust when a market changes. SB 886’s opponents included the California Large Energy Consumers Association, Pacific Gas & Electric and San Diego Gas & Electric [3]. Business was not of one mind: the Bay Area Council supported AB 2383 and opposed SB 886 [3, 4].

One smaller signing deserves credit. SB 1168, by Sen. Jerry McNerney, now only asks the CPUC to assess rate structures so data centers pay a reasonable share of grid costs [6]. An earlier version would have imposed surcharges on the gas and electricity data centers consume [6]. That version is gone, and the final bill passed the Assembly 78-0 [6].

CA California AB 2469: water assessments for one industry

What it does. AB 2469, by Assemblymember Diane Papan, bars a city or county from approving a permit for a new data center, or an expansion that raises its peak water use, unless the applicant provides a water supply assessment, projected water use and efficiency measures, workforce disclosures and, from January 1, 2028, a water scarcity plan [5]. The applicant must also assume the full cost of any water conveyance, treatment, storage or distribution improvements the water supplier says are needed [5].

Where it stands. Passed the Assembly 61-14 and the Senate 28-9; the Assembly concurred 61-12; the governor signed it as Chapter 436 [5].

Pratt’s read. The California Coastkeeper Alliance argues that the bill keeps ratepayers from paying for infrastructure “they do not create demand for” [5]. Paying for your own pipe is the same principle as paying for your own substation, and it is defensible.

The disclosure half is harder to defend, and the Senate’s own staff made the point: “this bill doesn’t apply these same requirements to other CII sectors or users with similar water demands” [5]. Other large commercial, industrial and institutional water users file nothing new under it. CalChamber and the Data Center Coalition opposed it. So did the League of California Cities, the California State Association of Counties and the Rural County Representatives of California, the governments that must administer it [5].

TX Texas Rule 22R045: home health agencies must suspend accused aides

What it does. The Texas Health and Human Services Commission proposed a rewrite of 26 TAC Chapter 558, the licensing rules for home and community support services agencies, which govern home health and hospice providers among others [7]. It carries out HB 1009 of 2023, which requires an agency to suspend an unlicensed employee whom HHSC finds has engaged in reportable conduct while that employee exhausts every appeal, including judicial review [7]. It also adopts SB 463 of 2025, requiring a workplace violence policy and prevention plan at any agency employing two or more registered nurses, and raises the initial fee for an alternate delivery site license that includes a change of ownership from $1,000 to $1,500 to match the three-year license term [7].

Where it stands. Published September 18 in the Texas Register; comments are due within 31 days, which this release counts as October 19 [7].

Pratt’s read. HHSC states the cost plainly. An agency may have to hire temporary staff to cover a suspended worker, new violations carry fees of $100 to $1,000 each, and HHSC “lacks sufficient information to estimate” how many agencies are small businesses [7]. The suspension rule comes from statute, so the commission had no choice about adopting it. Agencies can still use the comment period to ask how long a suspension that runs through judicial review can last, and who covers the shift in the meantime. The fee increase is a wash: $1,500 over three years is the same $500 a year as $1,000 over two, by this release’s arithmetic [7].

On the calendar

Comments on HHSC Rule 22R045 close October 19, by this release’s count [7]. SB 886’s interconnection tariff reaches data center agreements signed from January 1, 2027 [3]. The CPUC’s tariffs and AB 2469’s water scarcity plans are due January 1, 2028 [3, 4, 5].