AMENDED IN SENATE AUGUST 13, 2026

AMENDED IN SENATE JULY 2, 2026

AMENDED IN SENATE JUNE 15, 2026

AMENDED IN ASSEMBLY MAY 22, 2026

AMENDED IN ASSEMBLY APRIL 13, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

94

Introduced by Assembly Member Zbur

(Coauthors: Assembly Members Bauer-Kahan and Wallis)

February 20, 2026

An act to add Article 14.7 (commencing with Section 945) to Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, relating to electricity.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: yes

LEGISLATIVE COUNSEL’S DIGEST

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. Existing law authorizes the commission to investigate a single rate, classification, rule, contract, practice, or the entire schedule of rates, classifications, rules, contracts, and practices, of any public utility, and to establish new rates, classifications, rules, contracts, practices, or schedules.

This bill would require the commission, on or before January 1, 2028, in a new or existing proceeding, to provide for a classification of retail electricity consumers that are data centers that is separate and distinct from classifications of service for other commercial or industrial retail electricity consumers and has its own tariff, as specified. The bill would specify that an electrical corporation and a data center are not required to use the above-described classification of service if the commission has not approved the electrical corporation’s tariff for that classification of service.

This bill would require each electrical corporation to file a transmission and distribution tariff and a generation service tariff that meet certain requirements, as specified. The bill would also require each community choice aggregator or electric service provider to adopt a tariff for generation service consistent with certain requirements, as specified. By imposing new duties on community choice aggregators, the bill would impose a state-mandated local program. The bill would specify that these provisions only apply to a data center that enters into a new interconnection agreement to receive retail electrical service at the transmission level on or after January 1, 2027.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because the above provisions would be a part of the act, and because a violation of a commission action implementing the above provisions would be a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

The people of the State of California do enact as follows:

SECTION 1.

Article 14.7 (commencing with Section 945) is added to Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, to read:

Article 14.7. Data Centers

945.

For purposes of this article, all of the following definitions apply:

(a) “Costs of serving” includes, as applicable, the costs incurred by a load-serving entity in providing generation, transmission, distribution, energy, capacity, or ancillary electricity services, and any related costs or associated risks with serving a retail electricity consumer or a class of retail electricity consumers. “Costs of serving” does not include upgrades to the electrical transmission system or electrical distribution system necessary to energize a data center.

(b) (1) “Data center” means a facility that primarily contains electronic equipment used to process, store, and transmit digital information, which may be a freestanding structure or a facility within a larger structure, that uses environmental control equipment to maintain the proper conditions for the operation of electronic equipment, except as specified in paragraph (2).

(2) “Data center” does not include a publicly funded research facility, public safety facility, publicly funded national security facility, publicly owned facility, or utility facility.

(c) “Retail electricity consumer” means the end user of electricity.

945.1.

On or before January 1, 2028, the commission shall, in a new or existing proceeding, provide for a classification of retail electricity consumers that are data centers. The classification of service shall be separate and distinct from classifications of service for other commercial or industrial retail electricity consumers and shall have its own tariff.

945.2.

An electrical corporation and a data center are not required to use a classification of service provided for under Section 945.1 if the commission has not approved the electrical corporation’s tariff for that classification of service.

945.3.

(a) The commission shall require each electrical corporation to file a transmission and distribution tariff that does at least all of the following:

(1) Allocates the costs of serving the class of data centers in a manner that ensures that incremental costs for serving the class are not borne by other electrical rate classes.

(2) Does not result in, or have the potential to result in, increased costs to other retail electricity consumers.

(3) Ensures that a data center interconnected at the transmission level pays a reasonable share of the costs relating to wildfire mitigation, wildfire liability, electrification and environmental programs, and other societal cost obligations typically collected from distribution-level ratepayers.

(4) Encourages the development of data centers that bring high-wage and high-skilled jobs to California.

(5) Requires a data center seeking a new transmission interconnection to enter into a contract with the electrical corporation to prepay those interconnection costs and any distribution costs necessitated by the transmission interconnection of the data center. The minimum duration of the contract shall be at least 10 years, years and shall include early termination fees sufficient to ensure investment costs are covered.

(6) Requires the data center to certify to the commission that its facility meets the requirements of Sections 25545.3.3 and 25545.3.5 of the Public Resources Code.

(b) An electrical corporation may submit an exceptional case filing to approve a contract between the electrical corporation and a data center seeking interconnection at the transmission level for those facilities that seek to obtain retail electric service after January 1, 2027, but before the commission has approved a tariff filed pursuant to subdivision (a). A contract entered into pursuant to this subdivision shall be consistent with the requirements of this section.

945.4.

(a) The commission shall require each electrical corporation to file a generation service tariff that does at least all of the following:

(1) Allocates the costs of serving the class of data centers in a manner that ensures that incremental costs for serving the class are not borne by other electrical rate classes.

(2) Supports clean energy targets set forth in Sections 399.15 and 454.52 and other applicable state clean energy policies by facilitating the procurement of, or contracts for, generation necessary to serve data centers pursuant to this article using resources meeting the requirements of Sections 399.15 and 454.52, as determined by the commission.

(3) Allows for procurement of, or contracts for, generation resources that support the load-serving entity’s ability to meet the clean energy targets described in paragraph (4). (2).

(4) Ensures that tariffed data centers provide equitable contributions to reliability and other programs funded through charges generally collected through the generation component of a customer’s bill.

(5) Does not result in, or have the potential to result in, increased costs to other retail electricity consumers.

(6) Requires a data center to enter into a contract with the electrical corporation to prepay those incremental generation cost increases resulting from the data center’s load. The minimum duration of the contract shall be at least 10 years, years and shall include early termination fees sufficient to ensure the costs of serving the data center are covered.

(7) Requires the data center to pay a minimum amount or percentage, based on the data center’s projected electricity usage for the duration of a contract established pursuant to this section.

(8) Requires the data center to report to the electrical corporation the expected investments in onsite generation throughout the duration of service before entering into an interconnection agreement.

(9) Ensures that a data center tariffed pursuant to this section does not receive compensation for onsite generation in a manner that would result in cost shifts to other retail electricity consumers.

(b) The electrical corporation may submit an exceptional case filing to approve a contract between the electrical corporation and a data center seeking retail electrical service at the transmission level for those facilities that seek to start retail electrical service after January 1, 2027, but before the commission has approved a tariff filed pursuant to subdivision (a). A contract entered into pursuant to this subdivision shall be consistent with the requirements of this section.

945.5.

(a) Each community choice aggregator, consistent with Section 366.2, or electric service provider, consistent with Section 394, shall adopt a tariff for generation service that is consistent with the following requirements:

(1) Allocates the costs of serving the class of data centers in a manner that ensures that incremental costs for serving this class are not borne by other electrical rate classes.

(2) Supports the community choice aggregator’s or electric service provider’s ability to meet the clean energy targets set forth in Sections 399.15 and 454.52 and other applicable state clean energy policies by facilitating the procurement of, or contracts for, generation necessary to serve data centers pursuant to this article using resources meeting the requirements of Sections 399.15 and 454.52, as determined by the commission.

(3) Ensures that tariffed data centers provide equitable contributions to reliability and other programs funded through charges generally collected through the generation component of a customer’s bill.

(4) Does not result in, or have the potential to result in, increased costs to other retail electricity consumers.

(5) Requires a data center to enter into a contract with the community choice aggregator or electric service provider. The minimum duration of this contract shall be 10 years, and the contract shall include early termination fees sufficient to ensure investment costs are covered.

(6) Requires the data center to pay a minimum amount or percentage, based on the data center’s projected electricity usage for the duration of a contract, established pursuant to this section.

(7) Requires the data center to report its expected investments in onsite generation throughout the duration of service.

(8) Ensures that a data center tariffed pursuant to this section does not receive compensation for onsite generation in a manner that would result in cost shifts to other retail electricity consumers.

(b) This section does not authorize the commission to regulate the rates or terms and conditions of service offered by a community choice aggregator, consistent with Section 366.2, or an electric service provider, consistent with Section 394.

945.6.

(a) This article does not expand the amount of retail load eligible to participate in direct access transactions pursuant to Section 365.1.

(b) This article shall only apply to a data center that enters into a new interconnection agreement to receive retail electrical service at the transmission level on or after January 1, 2027.

SEC. 2.

No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.

SEC. 3.