Thursday, February 5, 2026

Pasadena Senator Proposes Banning Diesel Generators at California Data Centers

Senator Sasha Renee Perez via Facebook

SB 978 responds to Monterey Park opposition, would create separate electricity rate for large facilities and protect ratepayers from cost shifts

The data centers that power artificial intelligence, cloud computing, and streaming services would face new restrictions on diesel generators and be required to pay their own infrastructure costs under proposed legislation introduced Tuesday by State Senator Sasha Renée Pérez, who represents Pasadena and other San Gabriel Valley communities.

Pérez, a Democrat whose district office is on North Marengo Avenue in Pasadena, introduced SB 978 after residents in nearby Monterey Park brought her concerns about a proposed 250,000-square-foot data center that galvanized unprecedented community opposition. On January 21, the Monterey Park City Council unanimously adopted a moratorium on data centers and directed staff to draft a permanent ban—a response Pérez praised as “bold action.”

“I have heard urgent calls from my constituents, and others throughout the state, to regulate data centers and their impacts on energy, water and pollution,” Pérez said. “SB 978 bans the use of backup diesel generators that emit air pollution, prevents data centers from placing electricity costs onto ratepayers and directs state regulators to assess the impacts of data centers on California’s ability to meet its climate goals.”

The legislation goes further than a study-only measure that was the sole data center regulation to survive the 2025 legislative session after Big Tech and business groups successfully opposed more aggressive proposals. SB 978 contains five major provisions: banning diesel backup generators and mandating clean alternatives; directing the California Energy Commission to assess hyperscale data centers’ climate impacts; requiring use of local workers paid at prevailing wages; mandating upfront payment for transmission upgrades; and creating a separate electricity rate class for facilities operating above 75 megawatts—roughly equivalent to the residential energy consumption of Santa Rosa or Huntington Beach.

Hyperscale data centers, which support large-scale cloud computing and artificial intelligence, consume between 10 and 50 times more electricity per square foot than typical office buildings, according to industry estimates. National projections suggest data center electricity demand could double or triple by 2028, potentially accounting for 12 percent of total U.S. consumption.

Research from UC Riverside and the think tank Next 10 found that California data centers’ electricity use increased 95 percent from 2019 to 2023, with demand projected to rise as much as 356 percent above 2019 levels by 2028. Public health costs from related air pollution tripled during the same period—from $45 million to more than $155 million—and could reach $266 million annually by 2028, according to the research. By that year, data center pollution could add approximately 3,900 cases of asthma in California.

“Energy bills continue to skyrocket in California, especially burdening low-income people,” said Asha Sharma, state policy manager at Leadership Counsel for Justice and Accountability. “It is critical that major energy guzzlers—like data centers—do not increase energy bills for California consumers, while requiring a stop to their pollution of nearby communities with dirty diesel emissions.”

The proposed Monterey Park data center that prompted the legislation would have included 14 diesel backup generators with a combined capacity of 56 megawatts. The facility, backed by Australian investment firm HMC Capital, faced opposition from residents who packed City Hall on January 21. Nearly 80 people spoke against the project before the council voted unanimously for the moratorium.