AB2383 - Electricity: data centers.

Enrolled September 04, 2026 Passed IN Senate August 31, 2026 Passed IN Assembly August 31, 2026 Amended IN Senate August 28, 2026 Amended IN Senate August 13, 2026 Amended IN Senate July 02, 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 Assembly Bill No. 2383 Introduced by Assembly Member Zbur (Principal coauthor: Assembly Member Petrie-Norris) (Coauthors: Assembly Members Bauer-Kahan and Wallis) February 20, 2026 An act to add Sections 945.1, 945.4, 945.5, 945.6, and 945.8 to the Public Utilities Code, relating to electricity. LEGISLATIVE COUNSEL'S DIGEST AB 2383, Zbur. Electricity: data centers. 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, as part of a new or existing proceeding, the commission to require each electrical corporation to file a transmission and distribution service tariff and a generation service tariff for participating customers, as defined, that meet certain requirements, as specified. The bill would also require, on or before January 1, 2028, each community choice aggregator or electric service provider to adopt a tariff for generation service for data centers, as defined, consistent with certain requirements, as specified. By imposing new duties on community choice aggregators, the bill would impose a state-mandated local program. 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. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Section 945.1 is added to the Public Utilities Code, to read: 945.1. For purposes of this article, all of the following definitions apply: (a) “Data center” means a facility, or a part of a facility, that houses computing infrastructure, including graphics and central processing units, servers, storage devices, networking equipment, and associated power and cooling systems, for the primary purpose of processing, storing, or distributing electronic data, except as otherwise specified in this article. (b) “Electrical corporation” has the same meaning as defined in Section 218, but does not include an electrical cooperative, as defined in Section 2776. (c) “Facility” means a physical property, a plant, a building, a structure, or stationary equipment, located on one or more contiguous or adjacent properties in actual physical contact or separated solely by a public roadway or public right-of-way and under common ownership or common control. (d) “Nonparticipating customer” means a customer who does not receive electrical service pursuant to a tariff established pursuant to subdivision (a) of Section 945.2. (e) “Participating customer” means a data center tariffed pursuant to this article. (f) “Unbundled customer” means a customer receiving the generation component of their electrical service from an entity that is different from the entity providing the transmission and distribution components of the customer’s electrical service. SEC. 2. Section 945.4 is added to the Public Utilities Code, to read: 945.4. As part of a new or existing proceeding, the commission shall require each electrical corporation to file a transmission and distribution service tariff that does at least both of the following, to the extent permitted by federal law: (a) Ensures that all participating customers pay 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. (b) Ensures that a tariff adopted by the commission pursuant to this section shall be consistent with Section 945.2. SEC. 3. Section 945.5 is added to the Public Utilities Code, to read: 945.5. (a) As part of a new or existing proceeding the commission shall require each electrical corporation to file a generation service tariff that does at least all of the following: (1) Ensures the procurement of generation resources that support an electrical corporation’s ability to meet procurement requirements set forth by the commission, the clean energy targets set forth in Sections 399.15 and 454.52, and other state clean energy policies. (2) Ensures that participating customers provide equitable contributions to reliability and other programs funded through charges generally collected through the generation component of a customer’s bill. (3) Establishes a mechanism approved by the commission to ensure that a participating customer pays for those incremental generation cost increases resulting from the participating customer’s load to prevent nonparticipating customers of the electrical corporation from incurring stranded generation costs due to incremental procurement for participating customers. The minimum duration of the payment mechanism established pursuant to this section shall be at least 10 years and shall include all of the following: (A) Fees for participating customers that do not complete interconnection and early termination fees sufficient to ensure that other ratepayers are held harmless for costs incurred to serve the participating customer. (B) A requirement for a participating customer to provide upfront collateral or prepayment for incremental generation cost increases resulting from the participating customer’s load. (C) A cost recovery mechanism that ensures a participating customer pays a minimum amount or percentage, based on the participating customer’s projected load indicated in its interconnection application. This cost recovery mechanism shall be sufficient to ensure that other ratepayers are held harmless for costs incurred to serve the participating customer if the participating customer consumes less than its anticipated load. (D) Authorization for a participating customer to reduce the generation funding requirements pursuant to this paragraph by installing zero-emissions resources behind its meter, as determined by the commission. Any reductions to incremental generation funding requirements shall be relative to the amount of zero-emissions resources installed behind the customers’ meter. (E) A requirement that any resource procurement to serve the participating customer shall be consistent with paragraph (1) of this subdivision. (4) Requires the participating customer to report to the electrical corporation the expected investments in onsite generation throughout the duration of service. (5) Ensures that a participating customer does not receive compensation for onsite generation in a manner that would result in cost shifts to other retail electricity consumers. (b) A tariff adopted by the commission pursuant to this section shall be consistent with Section 945.2. (c) In adopting a generation tariff pursuant to this section, the commission shall set a minimum peak electricity demand threshold at which the generation tariff shall apply to any participating customer at or above that threshold. The commission may not set a minimum peak electricity demand threshold that exceeds 25 megawatts. (d) A generation tariff adopted pursuant to this section shall not apply to the following types of facilities that otherwise meet the definition of a data center pursuant to this article: (1) A publicly funded research facility. (2) Public safety facility. (3) A publicly funded national security facility, as identified by the commission. (4) Publicly owned facility. (5) A utility facility, including, but not limited to, a facility operated for the purpose of providing telecommunications services to the public by a terrestrial facilities-based telecommunications provider. SEC. 4. Section 945.6 is added to the Public Utilities Code, to read: 945.6. (a) (1) On or before January 1, 2028, each community choice aggregator, consistent with Section 366.2, or electric service provider, consistent with Section 394, shall adopt a tariff for generation service for data centers. (2) In adopting a generation tariff pursuant to this section, the community choice aggregator or electric service provider shall set a minimum peak electricity demand threshold at which the generation tariff shall apply to any data center customer at or above that threshold. The community choice aggregator or electric service provider may not set a minimum peak electricity demand threshold that exceeds 25 megawatts. (b) The generation tariff established pursuant to subdivision (a) shall, at a minimum, meet all of the following requirements: (1) Allocates the costs of serving data centers in a manner that ensures that incremental costs for serving this class are not borne by other electrical rate classes. (2) Ensures the procurement of generation resources that support a community choice aggregator’s or electric service provider’s ability to meet procurement requirements set forth by the commission, the clean energy targets set forth in Sections 399.15 and 454.52, and other state clean energy policies. (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) (A) Establishes a mechanism approved by the commission to ensure that a data center tariffed pursuant to this section pays for those incremental generation cost increases resulting from the data center’s load to prevent nonparticipating customers from incurring stranded generation costs due to incremental procurement for the data center. The minimum duration of the payment mechanism established pursuant to this section shall be at least 10 years and shall include all of the following: (B) Fees for data centers that do not complete interconnection and early termination fees sufficient to ensure that other ratepayers are held harmless for costs incurred to serve the data center. (C) A requirement for a data center to provide upfront collateral or prepayment for incremental generation cost increases resulting from the data center’s load. (D) A cost recovery mechanism that ensures a data center pays a minimum amount or percentage, based on the data center’s projected load indicated in its interconnection application. This cost recovery mechanism shall be sufficient to ensure that other ratepayers are held harmless for costs incurred to serve the data center if the data center consumes less than its anticipated load. (E) Authorization for a data center to reduce the generation funding requirements pursuant to this paragraph by installing zero-emissions resources behind its meter, as determined by the commission. Any reductions to incremental generation funding requirements shall be relative to the amount of zero-emissions resources installed behind the customers’ meter. (F) A requirement that any resource procurement to serve the data center shall be consistent with paragraph (2). (6) Requires the data center to report its expected investments in onsite generation throughout the duration of service. (7) 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. (c) 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. SEC. 5. Section 945.8 is added to the Public Utilities Code, to read: 945.8. (a) This article does not expand the amount of retail load eligible to participate in direct access transactions pursuant to Section 365.1. SEC. 6. No reimbursement is required by this act pursuant to Section 6 of Article XIII B 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 XIII B of the California Constitution.