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Sen. Padilla seeks tariffs to prevent data center cost‑shifting to ratepayers
Summary
SB 886 would require tariffs and financial protections for utilities and local ratepayers to ensure large data center customers pay their share of grid upgrades, prefund long‑term clean energy procurement, participate in demand response, and not shift costs to non‑participating customers; industry groups support many protections but worry about prescriptive statutory mandates and timing with CPUC proceedings.
Sen. Padilla told the committee SB 886 would require the Public Utilities Commission to authorize tariffs protecting non‑participating customers from cost shifts caused by very large energy users like hyperscale data centers. He said provisions include prefunding obligations, assignment of interconnection costs to the customer, demand‑response participation and protections against stranded asset cost shifts.
Matt Friedman (Tern) and Sam Uddin (Net 0 California) described the bills as necessary to prevent large data center loads from causing rate spikes and stranded assets. They said consumers overwhelmingly support requiring data centers to pay for grid connections and buy or build clean energy. Supporters included labor, climate groups and some local governments.
Opponents including PG&E, Silicon Valley Leadership Group and the data center coalition said the bill is premature given ongoing CPUC rulemakings, that statutory procurement mandates and detailed operational rules belong in regulatory proceedings not statute, and that certain transmission cost allocations may be infeasible to attribute to single customers. The committee accepted amendments and moved the measure to appropriations with several members recorded as aye and many not voting.
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