CaliforniaCalifornia sets power grid rules for data centers
The commission must set power connection rules by 2028, including protections for other customers and special requirements for data centers.
What it does
The commission must set or update rules for participating customers’ power connections and service. It must guard other customers against shifted costs and show certain generation charges separately.
Data centers connecting directly to the transmission grid must disclose other applications and cover assigned upgrade costs. Refunds are limited, and leaving early or failing to ramp up power use can trigger a fee.
Participating customers may join a new commission-approved program that shifts electricity use, if it creates no net costs for other customers.
Before the commission approves the new tariff, an electrical corporation may ask it to approve a data-center connection contract that meets the act’s requirements.
Argument forSeparating certain charges and guarding against cost shifts could help protect customers who do not join these arrangements.
Argument againstData centers could face large upgrade costs and fees if they leave early or use less power than planned.
More detail
The Public Utilities Commission must set or update rules for connecting participating customers and serving them with electricity. The rules cover participating customers receiving retail electric service, including transmission, distribution, and generation service. The commission must assess risks and benefits for other customers and prevent stranded costs or cost shifts to them. For customers with separate generation charges, those charges must appear as a separate bill item. The commission must establish or update the rules on or before January 1, 2028.
The commission must create a transmission-level connection tariff with cost, disclosure, refund, and early-exit rules for data centers. These rules apply to data centers entering a new agreement to receive retail electric service at the transmission level. Data centers must disclose applications for the same facility in other utility areas or jurisdictions, and certify that they meet specified state resource requirements. The customer is responsible for transmission upgrades and use under a commission-set method. Refunds depend on actual revenue covering allocated costs and are capped at 75 percent of annual net transmission revenue. A customer that leaves within 10 years or fails to ramp up its power use as required must pay an early-exit fee tied to the projected revenue gap. This tariff applies to new data-center connection agreements made on or after January 1, 2027.
A participating customer may join a new demand-response program approved by the commission. The option is for participating customers and depends on commission authorization. The program must not create net costs for customers who do not participate and must support specified power-shifting, reliability, resource-adequacy, or emissions goals, as determined by the commission.
An electrical corporation may seek approval for a contract with a data center before the commission approves the tariff. The contract must be with a data center seeking transmission-level interconnection. The contract must meet the act’s requirements. This option covers facilities seeking retail electric service after January 1, 2027, and before the commission approves the tariff.
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Where it stands
- Introduced
- Passed Senate
- Passed Assembly
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Sep 21Chaptered by Secretary of State. Chapter 438, Statutes of 2026.Latest
- Sep 21Approved by the Governor Gavin Newsom.Became Law
- Sep 9Enrolled and presented to the Governor at 2 p.m.To Governor
- Sep 1
- Vote recorded SB 886 Padilla Senate Third Reading By Papan. Result: pass.Lower
- Aug 31Assembly amendments concurred in. (Ayes 28. Noes 10.) Ordered to engrossing and enrolling.Major
- Vote recorded W/O REF. TO FILE. Result: pass.Upper
- Aug 31Unanimous consent granted to take up without reference to file.
- Aug 31In Senate. Concurrence in Assembly amendments pending.
- Aug 31Read third time. Passed. (Ayes 62. Noes 7. Page 7065.) Ordered to the Senate.Passed Assembly
- Aug 28Ordered to third reading.Minor
- Aug 28Read third time and amended.Major
- Aug 28Joint Rule 61(b)(16) suspended. (Ayes 57. Noes 1. Page 6819.)
- Aug 13Read second time. Ordered to third reading.Minor
- Vote recorded Do pass. Result: pass.Lower
- Aug 13From committee: Do pass. (Ayes 12. Noes 2.) (August 13).Minor
- Aug 13Coauthors revised.
- Aug 13Assembly Rule 63 suspended.
- Aug 5August 5 set for first hearing. Placed on suspense file.
- Jul 2From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR.Major
- Jun 29Read second time and amended. Re-referred to Com. on APPR.Major
- Jun 25From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 14. Noes 0.) (June 24).Major
- Jun 24
- Vote recorded Do pass as amended and be re-referred to the Committee on [Appropriations]. Result: pass.Lower
- Jun 10June 10 hearing postponed by committee.
- Jun 1Referred to Com. on U. & E.Minor
- May 26In Assembly. Read first time. Held at Desk.Minor
- Vote recorded 3rd Reading SB886 Padilla et al. Result: pass.Upper
- May 26Read third time. Passed. (Ayes 28. Noes 8. Page 4446.) Ordered to the Assembly.Passed Senate
- May 18Read second time. Ordered to third reading.Minor
- May 14Read second time and amended. Ordered to second reading.Major
- Vote recorded Do pass as amended. Result: pass.Upper
- May 14From committee: Do pass as amended. (Ayes 5. Noes 2. Page 4255.) (May 14).Major
- May 8Set for hearing May 14.
- Apr 13April 13 hearing: Placed on APPR. suspense file.
- Vote recorded Placed on suspense file. Result: pass.Upper
- Mar 27Set for hearing April 13.
- Mar 25Read second time and amended. Re-referred to Com. on APPR.Major
- Mar 24From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 12. Noes 4. Page 3588.) (March 17).Major
- Mar 17
- Vote recorded Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations]. Result: pass.Upper
- Mar 9Set for hearing March 17.
- Mar 5From committee with author's amendments. Read second time and amended. Re-referred to Com. on E., U & C.Major
- Feb 11Referred to Com. on E., U & C.Minor
- Jan 14From printer. May be acted upon on or after February 13.
- Jan 13Introduced. Read first time. To Com. on RLS. for assignment. To print.Introduced
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