Prop 45 Could Let Data Centers Skip California Review

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Data centers are a hot election issue in the U.S. midterms, and California's Proposition 45 has now been pulled into the argument. Environmental advocates say the measure's fast track for "essential" projects could cover data centers, even though that is not what supporters sell it for.

The sentence at the center of the dispute

Prop 45 lists nine kinds of "essential" projects that would qualify for streamlined review. Housing and clean energy are on the list. So is "broadband Internet access."

The definition covers projects that offer mass-market retail service by wire, wireless or radio to customers in California. The service must be able to send and receive data with all or substantially all internet endpoints. It also reaches capabilities that are incidental to the service and enable it to operate.

Richard Frank, a professor emeritus at UC Davis School of Law, and attorney Matthew McKerley read this broadly in a Daily Journal column. A proposed data center that includes broadband transmission infrastructure might fit, they write. Nuclear energy and dial-up internet access are excluded, but data centers are not named as barred.

The same column notes that companies developing data centers have put hundreds of thousands of dollars into the campaign for Prop 45.

The other reading

Supporters disagree. Attorney and lobbyist Kurt Oneto wrote in The National Law Review that data centers may help support the internet, but that does not make them essential broadband access projects under Prop 45. The Yes on Prop 45 campaign did not immediately respond to The Verge's request for comment.

The NAACP chapter for California and Hawaii backs the measure. Elsewhere the organization has been among the loudest critics of data center projects: it sued xAI over pollution from gas turbines at the Colossus 2 site, and its Texas branch wants a statewide moratorium. The chapter's president, Rick Callender, said in a September 9 press release that Prop 45 is "about accountability, not shortcuts."

What a faster review would change

The California Environmental Quality Act, known as CEQA, is the law Prop 45 would loosen. It requires state agencies to review environmental effects and to work with developers on limiting harm to nature and public health. It also requires them to gather community input and weigh public comment before approving anything.

For eligible projects, Prop 45 would give agencies 365 days to finish an environmental impact report. Legal challenges would have to be resolved within 270 days. Public comment would be limited to 45 days, where CEQA now sets a minimum rather than a maximum. Only federally recognized Native American tribes would have to be consulted, while current rules cover affected tribes even without that recognition.

Two shifts affect who does the work. Developers, not agencies, would draw up a single alternative project plan. Agencies could no longer keep asking for more information; they would have to name every requirement at the start.

The courtroom change

Fernando Gaytan, a senior attorney at Earthjustice, which opposes the measure, points to the courts. Even if a judge finds that an agency failed to follow CEQA, the judge could pause only the problematic parts of a project, not halt it. "It's hard to undo harms once you've already started a project," he says.

His fear is that developers will squeeze data centers into the essential-project definition. Backers say it would help with the housing shortage and with rising electricity demand, to be met by new renewable projects. Whatever happens to data centers, opponents worry the measure could weaken the role of the communities that the covered projects are meant to serve.

Our view

The fight is over how a legal definition is read, not over any named project. Both sides quote the same category and reach opposite answers. Because the measure does not mention data centers either way, agencies and courts would likely be the ones to settle it, and only after a developer tried to use the label.

Source: The Verge