The Overview

If you want to build a data center in California, you now have to go through a full environmental review first. California's SB 887, the California Environmental Quality Act: environmental leadership development projects: data centers: geothermal powerplant projects bill, became law when Gov. Gavin Newsom (D) signed it Sept. 21. California data centers had doubled their electricity use and water demand while pollution associated with them increased, CalMatters reported, and the facilities were expanding into water-stressed communities with limited public disclosure about their water use. ​

What the Law Does

The law defines "data center" for purposes of the California Environmental Quality Act (CEQA) and prohibits applying a categorical exemption to any data center development or operation project. Categorical exemptions are a standard shortcut that lets smaller or routine projects skip full environmental review; the law closes that door for data centers entirely.

The law also creates a pathway for qualifying projects: the governor may certify a data center as an environmental leadership development project if the lead agency confirms it meets specified conditions, making it eligible for streamlined CEQA review. The Office of Land Use and Climate Innovation, working with the State Energy Resources Conservation and Development Commission and other state agencies, must develop uniform statewide standards for those conditions. The law extends the same certification option to geothermal power plant projects.

Legislative Status

Sen. Steve Padilla (D) sponsored the bill, with co-authors Sen. Jesse Arreguín (D), Sen. Eloise Reyes (D), Sen. Akilah Weber Pierson (D), and two others. The Senate passed it 29-9 on May 26, the Assembly passed it 59-11 on Aug. 31, and the Senate concurred in Assembly amendments the same day, 29-8.

Sen. Padilla said at signing: "SB 887 ensures that data center projects are subject to meaningful environmental review, while providing a pathway for responsible projects to move forward." The Data Center Coalition argued the law's clean-power requirements were "virtually impossible" for data centers to meet, Canary Media reported.

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