News Stories

On August 21, 2026 the California Governor signs SB 887 – California Environmental Quality Act: environmental leadership development projects: data centers: geothermal powerplant projects.

The new law would among other things, subject data centers to CEQA while creating a pathway for qualifying projects to receive environmental leadership status and associated CEQA streamlining if they meet significant clean energy, grid cost, water use, and community benefit requirements.

• Data center development and operation would generally remain subject to CEQA, with data centers specifically excluded from certain categorical exemptions.
• A qualifying data center could receive environmental leadership project status if it meets strict requirements, including paying interconnection costs upfront and fully covering grid investments needed to serve the facility.
• Qualifying data centers would need 4 hours of zero-carbon energy storage at 100% of forecasted peak demand, use onsite storage for demand response, maximize behind-the-meter zero-carbon generation, and reach 100% zero-carbon electricity within 5 years, with 75% coming from newly developed resources.
• Data centers would have to use recycled water, water-efficient technology, or waterless cooling systems.
• Developers would be required to fully pay for interconnection and all electrical grid investments, including new generation capacity, with an early termination fee if the facility shuts down before those costs are recovered.
• Qualifying projects would have to enter into enforceable community benefits agreements addressing priorities identified by affected communities.
• Remaining greenhouse gas impacts would have to be mitigated through a hierarchy prioritizing onsite emissions reductions, followed by local reductions and offsets that provide direct environmental and public health benefits to affected communities.