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Committee backs bill to shield ratepayers from costs tied to large energy users such as data centers
Summary
The Assembly Committee on Utilities and Energy advanced SB 57, directing the California Public Utilities Commission to establish tariffs for large energy users — such as rapidly expanding data centers — intended to minimize cost‑shifting to other customers and to prioritize on‑site storage, emissions reductions and fair cost‑sharing for wildfire mitigation and other societal costs.
Senator Padilla presented SB 57, which seeks to protect non‑participating electricity customers from paying for transmission and interconnection costs associated with large new energy users — most notably data centers and other sudden large demands on the grid.
Sponsor testimony argued rapid data‑center build‑out can strain the grid, lead to large transmission upgrades, and in some cases leave ratepayers liable for stranded asset costs if large customers close before paying their share. Supporters asked the PUC to design a large‑energy‑user tariff that minimizes cost shifting, requires direct transmission customers to pay a reasonable share of wildfire mitigation and other societal costs, and prioritizes on‑site storage and demand response to reduce GHG emissions.
Utility representatives and industry witnesses testified that many of SB 57’s concerns are already being addressed through existing or pending PUC rulemakings (for example, a Rule 30 proposal to require pre‑funding of grid upgrades and existing large‑customer rate classes such as B‑20). Utilities and industry asked for flexibility rather than rigid statutory prescriptions and raised concerns about implementation timelines and scope — in particular, potential unintended capture of existing large industrial projects in progress. Some industrial energy consumers (e.g., steel producers) asked for carve‑outs so projects with prior investments would not be retroactively burdened.
Committee amendments shifted the effective date and made other technical changes; the committee advanced SB 57 to appropriations. Supporters included consumer and climate groups and labor; opponents included major utilities, the data‑center coalition and several business groups, some expressing conditional opposition while asking for continued negotiations on definitions and implementation timing.
Why it matters: SB 57 aims to set rules that allocate the costs of new high‑demand customers more equitably and encourage resources (storage, demand response, clean generation) that reduce grid stress and emissions. The bill would shape how utilities, large customers and regulators share the costs and risks of new load growth.
Limitations: The committee hearing recorded continued negotiation over definitions of “large energy user,” potential carve‑outs for projects with prior investment decisions, and the PUC’s ability to respond through existing rulemakings. The final tariff design will be developed at the PUC subject to statutory direction and ongoing proceedings.
