Bill Text: CA SB978 | 2025-2026 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Data centers: labor: electricity rates.
Sponsorship: Partisan Bill (Democrat 8)
Status: (Introduced) 2026-05-14 - May 14 hearing: Held in committee and under submission. [SB978 Detail]
Download: California-2025-SB978-Introduced.html
Bill Title: Data centers: labor: electricity rates.
Sponsorship: Partisan Bill (Democrat 8)
Status: (Introduced) 2026-05-14 - May 14 hearing: Held in committee and under submission. [SB978 Detail]
Download: California-2025-SB978-Introduced.html
CALIFORNIA LEGISLATURE—
2025–2026 REGULAR SESSION
Senate Bill
No. 978
| Introduced by Senator Pérez (Coauthors: Senators Arreguín and Hurtado) (Coauthors: Assembly Members Connolly and Harabedian) |
February 04, 2026 |
An act amend Section 913.11 of, and to add Section 740.22 to, the Public Utilities Code, relating to large-scale energy facilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 978, as introduced, Pérez.
Large-scale energy facilities: labor: electricity rates.
Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including electrical corporations. Existing law authorizes the PUC to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable.
This bill would require the PUC to establish a special rate structure for large-scale energy users, who would be defined as customers of electrical corporations operating facilities with operational requirements of at least 75 megawatts of electricity, to protect other customers of electrical corporations, prevent cost shifts to those other customers, and require large-scale energy users to pay for the electrical corporations’ upfront costs of transmission or distribution infrastructure upgrades necessary for the provision of electrical service to those users.
The bill would require the construction of those facilities to comply with certain labor requirements.
Existing law establishes the policy of the state that eligible renewable energy resources and zero-carbon resources supply 90% of all retail sales of electricity to California end-use customers by December 31, 2035, 95% by December 31, 2040, and 100% by December 31, 2045. Existing law requires the PUC, the State Energy Resources Conservation and Development Commission, and the State Air Resources Board, in consultation with all California balancing authorities, to annually issue a joint report related to meeting that state policy.
This bill would require that the joint report also include the impacts of large-scale energy users on the state’s ability to achieve the above-described state policy.
Under existing law, a violation of an order, decision, rule, direction, demand, or
requirement of the PUC is a crime.
Because a violation of a PUC action implementing the bill’s requirements would be a crime, this 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 a specified reason.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 740.22 is added to the Public Utilities Code, to read:740.22.
(a) For purposes of this section, all of the following definitions apply:(1) “Facility” means a facility with an operational requirement of at least 75 megawatts of electricity.
(2) “Large-scale energy user” means a customer of an electrical corporation operating a facility.
(3) “Skilled and trained workforce” has the same meaning as set forth in Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code.
(b) The commission shall establish a special rate structure for large-scale energy users that does both of the
following:
(1) Protects other customers of an electrical corporation and prevents cost shifts to those other customers.
(2) (A) Requires the large-scale energy user pay for the electrical corporation’s upfront costs for transmission or distribution infrastructure upgrades necessary to provide electrical service to the large-scale energy user.
(B) The upfront costs described in subparagraph (A) shall not be recovered by the electrical corporation from other customers of the electrical corporation.
(c) (1) A large-scale energy user shall only use onsite solar or wind generation and a battery electric storage system as backup power generation for the facility.
(2) A large-scale energy user that uses battery electric storage systems shall enter into a binding agreement with the local fire department to ensure adequate fire protection services are available, including fire protection for the battery electric storage system and dire response times for communities in proximity to the facility.
(d) (1) Notwithstanding paragraph (1) of subdivision (a) of Section 1720 of the Labor Code, construction of a facility constitutes a public works project for purposes of Article 2 (commencing with Section 1770) of Chapter 1 of Part 7 of Division 2 of the Labor Code.
(2) A contractor who enters into a contract to perform work on a facility shall do all of the following:
(A) The contractor
shall pay each construction worker employed in the execution of the work, at minimum, the general prevailing rate of per diem wages, except that an apprentice registered in a program approved by the Chief of the Division of Apprenticeship Standards shall be paid, at minimum, the applicable apprentice prevailing rate.
(B) The contractor shall maintain and verify payroll records pursuant to Section 1776 of the Labor Code and make those records available for inspection and copying as provided in that section. Notwithstanding Section 1776 of the Labor Code, the contractor shall not be required to provide copies of certified payroll records to any entity other than the Department of Industrial Relations and the commission.
(C) The contractor shall biannually,
on July 1 and December 31 of each year, submit to the commission digital copies of its certified payroll records, in a format consistent with systems used for compliance with Section 1776 of the Labor Code, for projects subject to this section. The commission shall retain these records as public records for five years.
(3) The requirement imposed in subparagraph (A) of paragraph (2) may be enforced through any of the following mechanisms:
(A) Within 18 months after completing the facility, by the Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code.
(B) By an underpaid construction worker or apprentice through an administrative complaint or civil action.
(C) By a joint labor-management committee through a civil action pursuant to Section 1771.2 of the Labor Code.
(4) If a willful violation of this subdivision has been enforced against a contractor for the construction of a facility pursuant to paragraph (3), that facility shall remain eligible to receive service pursuant to the rate structure established pursuant to subdivision (b) if restitution has been made to the affected workers and all associated penalties and fines have been paid.
(5) The commission shall require each large electrical corporation to include the requirements of this subdivision in each interconnection agreement with a large-scale energy user.
(6) This subdivision does not apply to a construction of a facility that is a public work, as defined in Section 1720 of the Labor Code, and that is subject to Article 2 (commencing with Section 1770) of Chapter 1 of Part 7 of Division 2 of the Labor Code.
(7) (A) The entity that engaged the contractor to perform work on a facility is not an awarding body, as defined in Section 1722 of the Labor Code. Public works project requirements not codified in this section do not apply to the entity. This
section does not affect the entity’s liability for nonpayment of wages or materials under Section 3 of Article XIV of the California Constitution.
(B) The contractor who enters into a contract with the entity described in subparagraph (A) to perform work on a facility is the awarding body only for the limited purposes of Section 1773.3 of the Labor Code.
(8) (A) All contracts for the construction of a facility shall require every contractor and subcontractor at every tier to use a skilled and trained workforce for the construction of the facility.
(B) Every contractor and subcontractor at every tier shall use a skilled and trained workforce for the construction of the
facility.
SEC. 2.
Section 913.11 of the Public Utilities Code is amended to read:913.11.
(a) Notwithstanding Section 10231.5 of the Government Code, the commission, Energy Commission, and State Air Resources Board shall, in consultation with all California balancing authorities, as defined in subdivision (d) of Section 399.12, as part of a public process, issue a joint report to the Legislature by January 1, 2021, and at least every four years thereafter.(b) The joint report shall include all of the following:
(1) A review of the policy described in subdivision (a) of Section 454.53, focused on technologies, forecasts, then-existing transmission, and maintaining safety, environmental and public safety protection, affordability, and system and local reliability.
(2) An evaluation identifying the potential benefits and impacts on system and local reliability associated with achieving the policy described in subdivision (a) of Section 454.53.
(3) An evaluation identifying the nature of any anticipated financial costs and benefits to electrical, gas, and water utilities, including customer rate impacts and benefits.
(4) The barriers to, and benefits of, achieving the policy described in subdivision (a) of Section 454.53.
(5) Alternative scenarios in which the policy described in subdivision (a) of Section 454.53 can be achieved and the estimated costs and benefits of each scenario.
(6) An evaluation of the impacts of large-scale energy users, as defined in Section 740.22, on the state’s ability to achieve the policy described in subdivision (a) of Section 454.53.
