California’s AB 2469 Won’t Force Closed-Loop Cooling — But It Could Block Your Data Center Permit
A water-disclosure gate, not a technology mandate. Here’s what the bill actually requires before September 30.
Key Points
You’re weeks away from finding out whether California just changed the rules for your data center project. Governor Gavin Newsom has until September 30 to sign or veto AB 2469, a bill that would block new data center approvals unless developers hand over detailed water-use plans first. If you have a project in the pipeline, this is the date that decides your permitting timeline.
Assembly Bill 2469, written by Assemblymember Diane Papan of San Mateo, would stop cities and counties from approving a new or expanded data center unless the developer first submits a water supply assessment and a water use assessment. Starting January 1, 2028, developers would also need a water scarcity plan describing how the facility would cut water use during a drought. The bill passed the Senate 28 to 9 on August 30, 2026, and the Assembly concurred in the final version 61 to 12 the next day. It was sent to Newsom’s desk on September 15. He vetoed a similar data center water bill last year, so this outcome isn’t guaranteed.
The Permit Path Under AB 2469
If AB 2469 becomes law, local agencies won’t be able to approve a data center permit in California without water paperwork attached first. The bill also makes you cover the full cost of any new water pipes, treatment, or storage your project needs, and it blocks construction entirely in groundwater basins the state has labeled critically overdrafted, unless you get a specific waiver. That changes your budget and your site-selection map before you break ground.
What the bill actually requires
AB 2469 does not tell you which cooling system to install. What it does is force a disclosure before you can break ground: a water supply assessment showing where your water will come from, and a water use assessment covering cooling, humidification, sanitary use, fire suppression, and maintenance. Local agencies get this information before they can approve your permit, and starting in 2028 you’ll also need to show how the facility handles an abnormally dry year, a drought year, a severe drought year, and an exceptional drought year, using U.S. Drought Monitor categories.
Karmactive has covered how AI’s rising electricity demand is already straining state grids, and California’s water fight is the other half of that same resource story. For context on AI’s broader water footprint, see our coverage of AI data centers and water consumption and our explainer on AI water footprint and cooling systems.
AB 2469 vs AB 2619 vs AB 93 (Vetoed)
| Bill | Status | Core Requirement |
|---|---|---|
| AB 2469 | On Newsom’s desk | Water supply + water use assessments before permit approval; water scarcity plan from 2028 |
| AB 2619 | On Newsom’s desk | Annual reporting of projected and actual water use, under penalty of perjury |
| AB 93 | Vetoed Oct 2025 | Would have required water use estimates at licensing and actual consumption at renewal |
The costs and the companion bill
The bill also stops you building in a groundwater basin the Department of Water Resources has designated as critically overdrafted, unless DWR grants a waiver after confirming the project won’t pose a disproportionate risk to a disadvantaged community. You would be on the hook for the full cost of any water conveyance, treatment, or storage infrastructure your project needs, not the local water supplier. Separately, AB 2619, also authored by Papan, would require data centers to report projected and actual water use, under penalty of perjury, when they apply for or renew a business license. Both bills sit on Newsom’s desk with the same September 30 deadline.
California’s Critically Overdrafted Groundwater Basins
Newsom vetoed a nearly identical Papan bill, AB 93, in October 2025, citing reluctance to impose rigid reporting requirements without understanding the impact on businesses and their customers. AB 2469 arrives on his desk again with the same author and a similar structure. His decision by September 30 will indicate whether that objection was about the earlier bill’s specific language or the underlying idea of mandatory water disclosure.
Newsom Decision Deadline
Does California require closed-loop cooling for data centers?
AB 2469 does not create a cooling-technology mandate. It creates a water-disclosure and planning requirement that developers must satisfy before a permit can be approved. Newsom has until September 30, 2026, to sign or veto it, after vetoing a similar bill last year.
Primary source: California Natural Resources Agency legislative update; AB 2469 text
