Committee advances SB 978 to require upfront payments and limit refunds for data‑center grid upgrades

Senators passed SB 978 as amended to the next committee after testimony emphasizing community impacts from data‑center development and the risk of stranded transmission costs.

Author Senator Perez described the bill as a response to constituent concerns when proposed data‑center projects appear without adequate local input. The bill would require data centers to prepay for new transmission or distribution infrastructure necessary to serve their facilities and would bar refunds of prepaid infrastructure contributions if a project later relocates or fails to proceed.

Lane Smith, a postdoctoral scholar at Stanford, said large loads can raise local air quality and affordability concerns by increasing backup‑generator use and by accelerating demand that outpaces new zero‑carbon supply. Supporters argued upfront payments and procurement obligations would protect ratepayers and incentivize cleaner resources.

Industry witnesses again urged caution. The Data Center Coalition and trade associations said the CPUC and existing rulemaking (including earlier state directives) are better placed to make granular cost allocations. Some labor and environmental groups said the committee amendments narrowed the bill appropriately to data centers and improved protections.

The committee moved SB 978 as amended to the Labor, Public Employment and Retirement Committee.