Bill > SB1168

This bill, starting January 1, 2027, would impose new surcharges on natural gas and electricity consumed by data centers, or by entities that produce electricity primarily for data centers. The Public Utilities Commission (PUC) and the State Energy Resources Conservation and Development Commission (Energy Commission) would be responsible for setting these surcharge rates annually. These surcharges are intended to ensure that data centers contribute to covering the costs of transmission and distribution infrastructure, and to help procure non-emitting resources needed to reliably serve their significant energy demands, ultimately aiming to reduce cost pressures on residential ratepayers, including those in low-income assistance programs like CARE and family rate assistance. Revenues collected from these surcharges would be deposited into a newly created Data Center Excess Energy Usage Surcharge Fund, with funds allocated to electrical corporations and local publicly owned electric utilities to help cover wildfire-related costs included in their rates. The bill also mandates that the PUC explore rate structures to ensure data centers pay their fair share for infrastructure and energy procurement, particularly focusing on non-emitting resources, and to alleviate costs for residential customers.