Electricity: data centers.

The bill text was restructured from a traditional legislative format with line numbers, page headers, and column layout into a web-based format with navigation elements (skip to content, home, accessibility, FAQ, sitemap, login). The amendment history moved from the document header to a sidebar list.

Amendment markup is now displayed inline within the text, showing both prior and current language side by side (e.g., 'does at least all both of the following' shows the old and new phrasing together), rather than presenting only the final clean text as in the previous version.

The bill's target population is narrowed from 'large energy use facilities' (a broader category defined by peak load thresholds and computing infrastructure criteria) to specifically 'data centers.' The prior version required the commission to classify new facilities meeting certain peak load and computing infrastructure criteria; those classification criteria are removed entirely.

The generation service tariff requirements (Section 945.4) now apply specifically to electrical corporations rather than to 'load-serving entities' broadly. The prior version's prohibition on data centers participating in net billing tariffs or net energy metering arrangements is removed.

A new Section 3 makes the entire act contingent on SB 886 of the 2025-26 Regular Session being enacted and becoming effective on or before January 1, 2027. If SB 886 is not enacted by that date, AB 2383 never takes effect.

The mechanism for imposing tariff requirements shifts from a reactive model (each electrical corporation must ensure tariffs meet requirements when it receives a request from a large energy use facility) to a proactive model (the commission shall require each electrical corporation to file transmission and distribution and generation service tariffs meeting specified requirements).

Removed the requirement that the commission consider how the new data center classification will impact electrification of emissions-intensive, trade-exposed facilities or entities that provide a public benefit.

New requirement that a data center seeking a new transmission interconnection must enter into a contract with the electrical corporation to prepay interconnection costs and any distribution costs necessitated by the interconnection, with a minimum 10-year duration and early termination fees sufficient to cover investment costs.

New requirement that a data center must prepay incremental generation cost increases resulting from its load under a minimum 10-year contract with early termination fees sufficient to ensure costs of serving the data center are covered.

Removed the definition of 'Facility' (buildings, equipment, structures on a single site owned by the same person) and the definition of 'Load-serving entity' (referencing Section 380).

The cost-allocation standard is changed from 'equal or proportional to the cost of serving the class' to 'ensures that incremental costs for serving the class are not borne by other electrical rate classes.' The prior version also included broader protections (avoiding unwarranted costs, equitable contributions to grid efficiency and resiliency, wildfire mitigation and climate mandates); these are consolidated into a narrower requirement that transmission-level data centers pay a reasonable share of wildfire mitigation, liability, electrification, and environmental program costs.

Added an exceptional case filing mechanism allowing electrical corporations to submit a filing to approve a contract with a data center seeking interconnection at the transmission level for facilities that seek retail electric service after January 1, 2027 but before the commission has approved the tariff.

The applicability trigger is clarified: the article applies only 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 (previously stated as 'commences receiving electricity service' without specifying the interconnection agreement mechanism).

A new definition of 'data center' is added: a facility primarily containing electronic equipment used to process, store, and transmit digital information with environmental control equipment. It explicitly excludes publicly funded research facilities, public safety facilities, publicly funded national security facilities, publicly owned facilities, and utility facilities.

The applicability provision (Section 945.6(b)) is narrowed to state the 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.' This limits the bill's reach to transmission-level data centers rather than all large energy use facilities.

The community choice aggregator and electric service provider section (Section 945.5) is substantially expanded with specific tariff requirements including cost allocation, clean energy support, equitable contributions to reliability programs, 10-year minimum contracts, minimum payment requirements, onsite generation reporting, and no-cost-shift provisions for onsite generation compensation.

Minimum contract duration is reduced from 15 years to 10 years across multiple provisions (Sections 945.3(a)(7), 945.4(a)(8), and 945.5(a)(5)).

Data centers seeking new transmission interconnection must prepay interconnection costs and any distribution costs necessitated by the transmission interconnection, with a minimum 10-year contract duration and early termination fees (Section 945.3(a)(5)).

Data centers must prepay incremental generation cost increases resulting from their load through a contract of at least 10 years with early termination fees (Section 945.4(a)(6)).

New provisions in Sections 945.3(a)(9) and 945.4(a)(9) ensure that data centers tariffed under this article do not receive compensation for onsite generation in a manner that would result in cost shifts to other retail electricity consumers.

Data centers must report expected investments in onsite generation before entering into an interconnection agreement, rather than merely before the initial point of service (Section 945.4(a)(8)).

New exceptional case filing provisions (Sections 945.3(b) and 945.4(b)) allow electrical corporations to seek commission approval for contracts with data centers seeking transmission-level interconnection after January 1, 2027 but before a formal tariff is approved.

Throughout the bill, the term 'rate schedule' is replaced with 'tariff,' and references to 'large energy use facilities' are supplemented or replaced with 'data centers' in most operative provisions.

The no-reimbursement provision (Section 2) is expanded to add an additional basis: local agencies or school districts have the authority to levy service charges, fees, or assessments sufficient to pay for the program mandated by this act.

The bill now explicitly covers 'load-serving entities' providing retail electrical generation service to large energy use facilities, not just electrical corporations. This broadens which providers must comply with the new tariff and contract requirements.

New Section 945.4(d) clarifies that the generation service tariff provisions do not authorize the commission to regulate 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).

The effective date language was changed from 'receives electricity service' to 'commences receiving electricity service' in multiple sections, clarifying that the provisions apply when service begins rather than at any point during the service relationship.

New Section 945.4 requires each load-serving entity receiving a request for retail electrical generation service from a large energy use facility to ensure its tariff meets specified criteria including cost allocation, no cost shifting, clean energy target compliance, equitable contributions to reliability and state programs, and encouragement of high-wage job creation.

The minimum contract duration for transmission and distribution service contracts between an electrical corporation and a large energy use facility was reduced from 15 years to 10 years (Section 945.3(a)(7)). The ESP/CCA contract in Section 945.5 still requires a minimum of 15 years.

New tariff criteria added in Section 945.3(a) require that tariffs not impede the electrical corporation's ability to meet clean energy targets under Sections 399.15 and 454.52, allow procurement of generation resources supporting those targets, and encourage development of facilities that bring high-wage and high-skilled jobs to California.

Electrical corporations must now submit proposed transmission and distribution tariffs (Section 945.3(b)) and generation service tariffs (Section 945.4(b)) to the commission for approval. However, a contract may be entered into before tariff approval if it meets all statutory requirements.

The definition of 'costs of serving' was expanded to include costs incurred by a 'load-serving entity' (not just an electrical corporation) and to add 'generation' to the list of covered services.

The term 'rate schedule' was replaced with 'tariff' in multiple locations throughout the bill, particularly for the classification of service under Section 945.1(a)(1). This reflects a shift toward using the more precise regulatory term for the pricing mechanism.

The bill now applies to electric service providers and community choice aggregators (CCAs) in addition to electrical corporations (investor-owned utilities). New sections 945.4 and 945.5 create parallel rate schedule and contract requirements for CCAs and ESPs serving large energy use facilities.

New section 945.6 explicitly states the article does not expand the amount of retail load eligible to participate in direct access transactions under Section 365.1, clarifying a boundary of the bill's authority.

New section 945.5(d) clarifies that nothing in the bill authorizes the commission to regulate rates or terms and conditions of service offered by a CCA, consistent with Section 366.2, preserving CCA rate-setting autonomy.

The fixed definition of 'large energy use facility' as a facility with a peak load of 20 megawatts or more interconnected under a retail transmission tariff is removed. The commission now determines the minimum peak load threshold, giving it flexibility to adjust eligibility criteria.

Rate schedules for large energy use facilities must now prohibit participation in net billing tariffs or net energy metering arrangements. This prevents these large facilities from offsetting their consumption with on-site generation credits.

Large energy use facilities must certify to the commission that they meet the requirements of Sections 25545.3.3 and 25545.3.5 of the Public Resources Code, which govern water usage reporting for data centers and similar high-consumption facilities.

The commission must now consider how creating the large energy use facility classification will impact the electrification of emissions-intensive, trade-exposed facilities or entities that provide a public benefit.

Contract minimum duration is now uniformly 'at least 15 years' for all contracts (previously the 15-year minimum applied specifically to transmission or distribution interconnection contracts). Early termination fees must be detailed to ensure investment costs are covered.

The requirement that rate schedules consider the impact of on-site generation on system reliability and cost allocation to nonparticipating customers is removed from the commission's approval criteria.

Applicability language changed from 'receives electricity service' to 'commences receiving electricity service' on or after January 1, 2027. This narrows coverage to facilities that begin service after that date rather than those already receiving service.

References to clean energy targets changed from citing Senate Bill 1020 generally to specifically citing Sections 399.15 and 454.52 of the Public Utilities Code and other applicable state clean energy policies.

References to 'electrical corporation' throughout the bill were changed to 'load-serving entity,' extending the bill's requirements beyond investor-owned utilities to include community choice aggregators and other entities that serve electricity to end users.

Section 945.3(a) now requires contracts to cover not just transmission, generation, or distribution service but also 'cost of service and the cost of energizing the facility,' broadening what must be addressed in the contract.

New subdivision 945.1(a)(2) requires the commission to explicitly include facilities housing computing infrastructure (GPUs, CPUs, servers, storage devices, networking equipment, and associated power and cooling systems) used primarily for processing, storing, or distributing electronic data in the large energy use facility classification, directly targeting data centers and AI facilities.

The definition of 'costs of serving' was narrowed: the exclusion for grid upgrades now applies only to upgrades 'necessary to energize the large energy use facility' rather than all transmission and distribution system upgrades, meaning other upgrade costs are now included in what must be allocated to the class.

A new definition of 'load-serving entity' was added, incorporating the definition from Section 380 of the Public Utilities Code.

Section 945.1(b) changed from requiring rate schedules to 'do all of the following' to 'do at least all of the following,' giving the commission flexibility to impose additional requirements beyond those listed.

The prohibition on cost-shifting in Section 945.1(b)(3)(B) was strengthened by removing the word 'unreasonably,' making any shifting of large energy use facility costs to other consumer classes prohibited rather than only unreasonable shifts.

The clean energy target reference in Section 945.1(c)(4) was broadened from specifically citing Senate Bill 1020 to referencing 'Sections 399.15 and 454.52 and other applicable state clean energy policies.'

Section 945.1(c)(5) now limits the generation procurement requirement to cases where the large energy use facility elects to receive generation service from the electrical corporation rather than from a community choice aggregator or electric service provider.

New provision in Section 945.3(b)(2) requires contracts to 'detail fees for early termination of the contract to ensure investment costs are covered,' protecting load-serving entities from stranded investment if a facility leaves early.

Section 945.3(b)(3) changed the minimum payment requirement from 'a minimum amount or percentage' to just 'a percentage' based on projected electricity usage, removing the option for a flat minimum dollar amount.

New Section 945.3(e) (second paragraph) requires that contract terms be consistent across load-serving entities, ensuring uniform treatment regardless of which entity serves the facility.