Assembly hearing urges better data on water use by data centers and other large CII users

The California State Assembly convened an informational hearing on March 12, 2026, to examine commercial, industrial and institutional (CII) water use, with particular attention to data centers and gaps in current reporting. Chair Pappan opened the session by saying, "We're here today to discuss the future of California's water at a moment when the state is trending toward the possibility of yet another low water year," and asked state agencies and experts to explain what the legislature needs to know to plan.

The hearing brought technical staff from the Department of Water Resources and the State Water Resources Control Board, water-supplier representatives and independent researchers. Ryan Bailey of the Department of Water Resources described the planning framework that governs suppliers—urban water management plans (UWMPs) updated every five years and water-supply assessments (WSAs) required for large projects—and reminded the committee that the statute exempts "process water" (which statute and staff say includes data-center cooling water) from some statewide performance targets. "Data center cooling water is considered process water by statute," Bailey said, noting that WSAs and local planning remain central tools for assessing large developments.

Eric Ekdahl of the State Water Resources Control Board said the board has adopted 2024 reporting rules that assemble supplier-level data, but the CII portion of that reporting is more aggregated than many lawmakers would like. He told members the board is compiling 2025 reports and preparing compliance engagement ahead of an enforceable phase that begins on 2027-01-01. "What we're going to do with the data before 2027 is basically look at our people meeting their urban water use objectives," Ekdahl said, adding that the board is working with suppliers to resolve reporting and variance questions.

Researchers and supplier representatives told the panel that existing averages mask high local peaks and wide variation across customers. Heather Cooley of the Pacific Institute summarized state-level estimates: CII accounts for roughly 30% of urban water use statewide (about 2.4 million acre-feet per year) but varies by region and supplier. Professor Shaollei Ren presented research showing data centers can produce very high peak-day demands and high consumptive ratios—he noted examples where a single facility's summer peak comprised a large share of a system's top users and that consumptive (evaporative) losses at some centers can be 75–80% of withdrawals—meaning withdrawals greatly exceed returned wastewater.

Water suppliers described practical steps they are taking. Ken Jenkins of California Water Service said his utility used an AI-assisted classification pilot to map tens of thousands of CII customers and to identify the highest users for tailored outreach and incentives. Jenkins described projects where process changes and upgraded reverse-osmosis systems reduced water use dramatically at hydrogen-production and commercial-laundry facilities and saved tens of millions of gallons over a project life. "We did use AI to classify our CII customers with great success," Jenkins told the committee, urging that classification and targeted programs be part of the state's approach.

Committee members pressed agencies on several recurring concerns: whether data centers are fully captured under CII reporting, whether recycled water is being treated separately, how process-water trade-secret protections affect disclosure, who bears costs for new infrastruture when a large CII user connects, and whether state rules should demand prior economic analysis before tightening standards for new sectors. Agency witnesses repeatedly emphasized that many decisions are local—WSAs, will-serve letters and local land-use approvals—and that the state's regulatory changes aim to provide better supplier-level data to inform those processes. Ekdahl and others flagged statutory trade-secret and confidentiality considerations as complicating mandatory facility-level disclosures.

Public commenters and stakeholders recommended policy directions. Water Reuse California urged that recycled-water partnerships for data centers be explored, especially in regions such as the San Joaquin Valley. California Coastkeeper Alliance urged that utilities charge rates and require infrastructure contributions so high-consumption CII users do not shift costs to low-use or low-income customers.

The hearing ended without formal votes. Chair Pappan said the committee will continue to seek data and work with agencies and suppliers to ensure reporting and local planning tools are available to anticipate impacts. The hearing's next steps are to compile the newly reported supplier data, refine classification efforts and monitor how the board and DWR employ those datasets ahead of the 2027 enforceable-objective date.

Sources: testimony from Ryan Bailey (Department of Water Resources), Eric Ekdahl (State Water Resources Control Board), Ken Jenkins (California Water Service), Melissa Malek (California Water Efficiency Partnership), Heather Cooley (Pacific Institute) and Professor Shaollei Ren (UC Riverside).