As usual, California is first in the nation…for ridiculous rules. Recently, Monterey Park residents voted overwhelmingly to permanently ban data centers. Meanwhile, legislation making its way through the California State Legislature would impose all sorts of onerous rules on these innovative projects. At the core of these restrictive efforts is a barrage of misinformation charging that data centers are to blame for rivers drying up, electricity bills soaring, and run-away noise pollution. As a recent analysis by the Taxpayers Protection Alliance (TPA) makes clear, these claims are completely unfounded. California can lead a digital renaissance and create thousands of well-paying jobs, but not with heavy-handed bureaucracy buoyed by falsehoods.
Data centers are quickly being built across the country—and California is losing out. As San Francisco Chronicle reporter Emma Stiefel notes, “California is currently home to 5% of the U.S.’ total data center capacity, according to a Chronicle analysis of data from energy database company Cleanview. But if all data center plans announced during the current building boom pan out, California’s share will shrink to 1%. Most experts agree that the biggest drag on data center development in California is energy costs and availability.” Given all the proposals to restrict data centers coming down the pike, it’s little wonder that California is lagging.
The California State Senate recently passed Senate Bills 886 and 887—both of which authored by state Senator Steve Padilla. D-San Diego. SB 886 would mandate that the California Public Utilities Commission establish a special charge to “protect” ratepayers from the transmission costs that supply large data centers. SB 887 would mandate onerous environmental reviews for all data center projects, in addition to a land use review regardless of whether local zoning permits such use by right.
Even if California lawmakers kiboshed those bills and municipalities such as Monterey Park dramatically reversed course, the state would likely still struggle to attract investment. That’s largely because California has mandated a transition to a 100 percent zero-carbon electricity supply by 2045, with increasingly aggressive interim targets. Power grids require extensive upgrades to manage peak demand and comply with regulations, resulting in some of the highest power rates in the country.
Yet, in the bizarre view of lawmakers such as Sen. Padilla, state woes such as rising electricity bills and water problems are the result of data centers, not bureaucracy run amok. In justifying his legislative proposals to restrict data centers, Sen. Padilla has cited, “significant community concern about the potential impacts that the data center could pose on public health, energy costs, and water use.”
TPA’s findings show that many of the claims surrounding data centers’ resource consumption in California are significantly overstated. The data indicate that data centers accounted for just 0.2 percent of all water consumption in California in 2025. In other words, more than 99.8 percent of water use came from other sources, including agriculture, residential consumption, industry, and other commercial activities. TPA’s chart makes clear what irresponsible politicians have not: data center water consumption is virtually imperceptible when compared to overall statewide water usage.
TPA’s analysis also finds that data centers consumed only a modest share of California’s electricity. In 2025, data centers accounted for 5.1 percent of statewide electricity consumption, meaning nearly 95 percent of power usage came from all other sectors of the economy. While data centers undoubtedly require substantial amounts of electricity to support cloud computing, artificial intelligence, and digital services, the figures demonstrate that they remain a relatively small portion of California’s overall power demand.
Taken together, these findings challenge the narrative that data centers are overwhelming California’s water supplies or electrical grid and suggest that policymakers should focus on onerous regulations—not economic growth—to tackle scarcities and cost increases.
California can lead the way in digital innovation and create exceptionally well-paying blue- and white-collar jobs in the process. That cannot happen unless state policymakers stop demonizing data centers and start embracing a light-touch pro-growth approach. Data centers are simply not to blame for all the world’s ills.
Ross Marchand is the executive director of the Taxpayers Protection Alliance.