Data Center Permits: What Building Departments Must Ask
Forty diesel generators. Ninety-nine megawatts. Forty thousand gallons of water. Those numbers don't describe a science-fiction plot — they describe a data center proposal that could land on your permit counter next month.
Understanding the data center permit review process will help mitigate risks associated with large-scale projects.
And when it does, the building will probably look like an office building.
Identifying potential challenges in the data center permit review can lead to more effective planning and execution.
That's the quiet risk in data center permit review. A familiar-looking structure makes an unfamiliar project feel routine. Tilt-up walls, a modest entry, a big flat roof. Nothing about the elevation warns you that inside is a facility with the electrical demand of a small city, the cooling needs of an industrial plant, and a backup power system that changes how your fire and air-quality reviews have to work.
Awareness of the complexities involved in a data center permit review will help in achieving compliance and regulatory standards.
Our understanding of the data center permit review process must align with local regulations to avoid compliance issues.
The data center permit review process is essential for ensuring that all local regulations are met before project approval.
"Looks Like an Office Building" Is How Reviews Go Wrong
Each stage of the data center permit review should be approached with diligence to avoid oversights.
Before "looks familiar" becomes "approved," a review team needs answers to a few operational questions that don't appear on a typical plan set:
How will the facility actually operate? Load profile, redundancy tier, expansion phases, and whether the shell you're approving today is sized for a much bigger build tomorrow.
What will it demand from local infrastructure? Feeder capacity, substation timing, water supply, sewer discharge, and road impacts during and after construction.
How is it cooled? Air-cooled, evaporative, or liquid cooling each carry different water volumes, mechanical equipment, and long-term utility consequences.
Analyses during the data center permit review are fundamental for understanding infrastructure impacts and future needs.
What happens when the power fails? Generator count, fuel storage quantities, permitting for emissions, testing schedules, and the noise those tests generate.
None of these are exotic questions. They're just questions that rarely get asked when a project reads as "commercial shell."
99 Megawatts Is Not a Coincidence
Here's where code professionals should sharpen their instincts. In California, data centers with capacities between roughly 50 and 100 megawatts can pursue a Small Power Plant Exemption (SPPE) instead of going through the California Energy Commission's full Application for Certification (AFC) process. Above 100 megawatts, that exemption lane closes.
Engagement during the data center permit review fosters better understanding and smoother processes among stakeholders.
So when a proposal arrives at 99 megawatts, that number isn't a coincidence. It's a design decision.
That's the broader lesson worth carrying into every review: regulatory thresholds don't just shape how projects get reviewed — they shape how projects get designed. Once you understand that, you start reading applications differently. You notice numbers that sit suspiciously close to a line. You ask what happens in phase two. You ask whether a future expansion quietly re-triggers a process everyone just avoided.
Every aspect of the design must consider the upcoming data center permit review to ensure all facets are addressed.
Each design phase must contemplate the upcoming data center permit review to ensure compliance and operational readiness.
Being the Local Layer Without Being the Weak Link
The most dangerous sentence in a multi-agency review is: "I thought another agency was handling that."
That's not a review strategy. When a data center proposal comes through, the question isn't simply "who's approving this?" It's:
Clearly defined objectives in the data center permit review process can improve project outcomes and community relations.
What exactly is each agency reviewing?
What remains the local team's responsibility?
A proactive approach to the data center permit review can lead to enhanced stakeholder collaboration and satisfaction.
Who is verifying that nothing falls between those reviews?
State energy review, air district permits, water agency approvals, and utility interconnection all cover pieces of the picture. None of them covers your local code compliance, your inspection program, or your community's expectations. Being the local layer should never mean being the weak link.
A Moratorium Buys Time, Not Answers
It's essential to recognize how data center permit review influences project timelines and stakeholder relations.
Maximizing the potential of the data center permit review will yield substantial benefits for project timelines and community impact.
Many jurisdictions respond to data center pressure with a moratorium. Asking for more time can be entirely reasonable — but the follow-up question matters more than the pause itself: more time to do what?
Used well, that window produces real deliverables: an infrastructure demand study, clearer submittal and review standards, defined thresholds for when projects get elevated, and a shared information base so building, planning, fire, public works, utilities, and city leadership aren't working from different assumptions. Used poorly, the clock simply runs out and the same unprepared team faces the same application.
Efficient data center permit review practices lead to smoother project execution and community satisfaction.
If your city is considering data centers, the work performed during a moratorium deserves as much attention as the decision to adopt one. What needs to be studied? Who owns each piece? What does "ready" look like?
Engaging the community early can improve the data center permit review process significantly.
Start the Conversation Before the Application
The best time to build your data center review approach is before a proposal exists. Get the departments in one room. Walk through a hypothetical submittal. Identify the gaps while the stakes are still theoretical.
Building a strong foundation for data center permit review will streamline future applications and approvals.
Because the real question for your community isn't only "can we bring this project here?"
Ultimately, the data center permit review must comprehensively address community concerns to ensure a successful project integration.
It's "what do we need to understand before we do?"
Listen to the data center episode of Takis Talk at TakisTalk.com, on Apple Podcasts, or on Spotify.
Okay, so the the buzz phrase nowadays is AI. AI this, AI that. We at the building department we're inundated by new vendors every day. We can use AI for your plan review, for your remote inspections, for everything. You know, even there's some of us that even do stupid things like maybe uh waste our time making little animated dogs that pretend to be building officials. I don't know. But here's the thing. Have you ever wondered where does AI live? What does AI eat? What is this beast? It actually is a ravenous monster. Consider this. A land use application comes across your counter. On paper, it's an office building. Office use, maybe a warehouse. Nothing exotic. It fits your zoning. Your planner glances at it, it checks the boxes, and moves along. And then the plans come in for a building permit. And you start to notice things. You notice that this office needs its own electrical substation. You notice it's drawing more power than a small town. You notice there are diesel generators on the site plane. Not one or two, but dozens. You notice the water demand. You notice the cooling. And somewhere in the back of your mind, a little voice says, that's not an office. That's a data center. And it walked right in the front door of your building department wearing a costume, your code handed it. Okay, so that's not clickbait. That's just not my speed. This is really happening in California cities right now. So let's talk about it. Welcome to Takis Talk. I'm Greg Gittakis, your host. And I manage the building inspection and the code enforcement officers for my jurisdiction, which means my building inspectors are going to go out, they're going to look at this project when it's being put together. My code enforcement officers are going to feel the calls that come in after the fact when those generators start kicking on in the middle of the night. Okay, so before we go any further, the standard disclaimer. This episode is general education and commentary, not legal advice. So let's get into it. So here's the question I want to hit you with today. What's the biggest building your department will ever permit? Most of you are thinking high-rise tower, something downtown, big hospital, maybe a stadium, master plan community, something with a ribbon cutting where the mayor's out there with a giant pair of scissors. But what if the biggest, most consequential, most infrastructure hungry building in your department ever touches doesn't look like any of those? What if it's a low windowless box by the freeway? Most people drive past every day without giving it a second thought. Inside that box is enough computing power, enough electrical load, enough backup diesel, and enough water demand to reshape your entire grid, your air quality, and your groundwater basin. That's the data center. And in 2026, the data center is not somebody else's problem anymore. It's a California building department problem. It's a zoning problem. It's a code enforcement problem, boy, is it. It's a fire problem, an electrical problem, an air quality problem, a water problem, and wait, is this even the right use a zone? Problem. It's a fire problem. It's an electrical problem, an air quality problem, a water problem. And wait, is this even the right use in this zone? Problem. All at once. All landing at your counter. The reason I'm doing this episode now is the ground is shifting fast. Cities across California are slamming down moratoriums. The state legislature is running multiple bills at this thing. The California Energy Commission has a review process most building officials have never had to think about. And the whole thing is being driven by the AI boom, which means the demand is not slowing down. It's accelerating. So today I want to walk you through what a data center actually demands, why your existing code probably didn't see it coming, what cities are doing right now, what the state is doing about it, and most important for us, what it means when it lands on your counter and on your inspection card. This is a practical explainer and commentary episode built on real ordinances, real energy commission filings, and the real bills moving through Sacramento. So
let's go. Let's start with the definition. Because half the problem here is that the data center doesn't fit neatly into the boxes our codes were built around. In plain language, a data center is a building full of computer servers. That's it. That's the whole thing. Racks and racks of servers, running around the clock, storing and processing data. In the AI era, a lot of them are running the giant machine learning models everybody's talking about, which are enormously power hungry. Now here's why it breaks our code framework. When your zoning code was written and your building code was set up for occupancy classifications, a building full of computers didn't have a natural home. It's not really an office. There are almost no people in it. It's not really a factory. There's nothing being manufactured in a traditional sense. It's not a warehouse. It's not storing pallets of goods. It's not the typical server farm that we're accustomed to. So what is it? And that ambiguity is the loophole. See what I'm doing here? I'm setting up the whole rest of the episode. Because a use doesn't clearly fit a category. A savvy applicant will find the category that's easiest to get through. And a lot of California zoning codes, the path of least resistance is call in an office or light industrial use, something that's already allowed, and slide it through without the scrutiny that it actually deserves. Let me put
some numbers on why the impacts are so far out of scale with this label. Take one real proposed project. Now I'm probably going to say this wrong, but it's the RB Inuacern Data Center in Kern County, sitting inside the Indian Wells Valley Groundwater Basin. According to the California Energy Commission's own project file, the facility proposes 40 diesel fire generator sets, providing up to 99 megawatts of backup emergency generation for its operations in case of utility outages. 99 megawatts of backup power, 40 diesel generators for one building. So if you do the math on that, that's enough power for approximately 80,000 homes. Let me say that again. Enough power for 80,000 homes. That's a lot of power. When we look at the water, that same project estimates roughly 40,000 gallons of water per day, according to the local community services district, in a groundwater basin that is already stressed. Let's do that math. So we're looking at enough water per day for approximately 133 homes. Okay, let's let that process for just a minute. 40 diesel generators, 99 megawatts of power, 40,000 gallons of water a day. And the zoning application says office building. Really? Another question I have is what are the implications in terms of, you know, we usually look at things like parking and accessibility. If you have something like this, are there special conditions? I mean, obviously you're not going to have a huge amount of human beings there. So what are we doing in that regard? That's the disconnect. That's the gap between what the paperwork says and what the building actually does. And the gap is exactly where building officials and code enforcement live. And let me add a piece that makes this a little urgent. The reason it's landing now and not five years ago is artificial intelligence. That's obvious. The current wave of data center construction in California is being driven by the AI boom. AI workloads are dramatically more power-hungry than the storage and web hosting server farms that we had a decade ago. Training and running large machine learning models takes enormous sustained electrical load and enormous cooling. So facilities getting proposed today are bigger, denser, hotter, and thirstier than the ones your code might have brushed up against years ago. This is a moving target. It's moving towards more intensity, not less. That's why the legislature is scrambling. That's why the moratoriums are landing. And that's why I'm doing this episode this week instead of shrugging it off. The demand curve is going straight up. So the first takeaway for the day is very simple. When you hear data center, don't picture an office with a lot of laptops. Picture a small power plant with a groundwater straw and a diesel farm bolted to the side of it. Because that's closer to the truth of what you're being asked to permit. One more thing before I move on. I want to be fair here. I'm not anti-data center. Let's say that plainly. These facilities are the backbone of the modern economy. Your banking, your medical records, your kids' homework in the cloud, our crazy Roscoe dog, all that stuff is AI. It's great and it's changing our lives. The infrastructure matters. This isn't about keeping them out. It's about seeing them clearly and permitting them honestly so that the thing that got built is the thing that got reviewed. That's the whole ballgame for the building department. Now, one of the things I want to say here is I've been around for just a minute. I've seen all the booms and the latest whatever, right? And we had 99 2000s, the dot-com explosion, we've had the smartphones, we've had all these things. And we as a nation need to stay at the forefront and continue to be innovators and leaders. But we also have to be smart about this. There are a lot of alternatives here, and we as the building officials are going to help to shape this because we're not the guys writing the code and creating that AI. We are feeding AI, we are sheltering AI, we're giving AI a home so that AI can function. And unless we do that, AI is not going to exist. Let's talk about what happens when cities realize what just walk through the door.
Because the pattern across California right now is remarkably consistent. A project gets proposed, the community notices the diesel, the power, the draw, the water, all those things, then the phones start ringing, and city council reaches for the emergency break. And that emergency break is called a moratorium. Let me give you a couple of concrete examples because this is where it gets real. Okay, start with Oakley out in Contracasta County. In April of 2026, the Oakley City Council unanimously, five to nothing, adopted an urgency ordinance putting a temporary moratorium on data centers within the city. And I want you to notice how these urgency ordinances work, because it's a useful piece of the process for all of us to understand. Under California law, the initial urgency moratorium runs for a short window, about 45 days. Then it could be extended for about 10 months and 15 days, and then another year. So all told it comes up to a maximum of about two years. And here's the part that matters at the counter. While that Oakley moratorium is in effect, the city says it will not receive, accept, process, or approve any data center land use applications. It even reaches into their existing planned development districts. It applies to requests that are asking to amend an existing district to add data center as an allowable use. So it didn't just pause the front door, they locked the side doors as well. Okay, so why'd they do this? The stated purpose is honest. It's the right instinct to buy time. Time for the council and staff to study the issue, gather public input, and actually write zoning regulations for data center land use before it gets built. In other words, they realized their code never contemplated this use, and rather than approve something they'd regret, they hit the pause to go write some rules. I want to underline something about the mechanics of the Oakley Ordinance because it's a masterclass in how these tools actually function. Oakley set up joint meetings between the City Council and the Planning Commission, and it directed staff to run a Planning Commission workshop and a city council workshop during the pause. It also built in accountability. The city manager or designee has to prepare a report describing the measures taken to address the condition that triggered the moratorium. And that report has to come to the council no later than 10 days before the ordinance expires. So this isn't a lazy pause where everybody goes on vacation. We'll just hit a moratorium, hit a pause, and hopefully they'll go away and that'll be it. It's a structured sprint to write real rules with deadlines and public workshops baked in. If you're ever the one drafting one of these, that's the model to steal. A pause with a plan attached, not just a pause. Don't run and hide, regroup and come back at it. Now go south to Monterey Park and San Gabriel Valley. Monterey Park went even further. They didn't just pause, they moved towards prohibiting data centers outright, adopting a data center prohibition ordinance. They started with an urgency prohibition and then extended it, working through the process across early 2026. Different city, different tool, same underlying reaction. This doesn't belong here, and we need to do something before it's too late. Now something I want to toss out there, just a crazy thought I've had. We know that the state has pushed through all sorts of ADU laws and mandates and so forth. How long before the industry or demand starts state legislators pushing through ordinances or laws that are going to mandate that we have to approve these data centers? Hmm. I think it might be around the corner. So what's the lesson for those of us running building and code enforcement? Well, a few things. First, the moratorium is a planning and legislative tool, not a building code tool, but it lands squarely on your permit intake. When your council adopts one of those, your counter staff need to know that day the data center applications don't get accepted. You need a clear, consistent answer for the applicant who's already got money in the game, and they're going to push. That's a customer service and consistency challenge. You know, that's something that we all strive for. Uniform answer for the same question, right? Second, notice the timing pressure. These moratoriums are ticking clocks. Oakley's own timeline had staff and city attorney aiming to introduce permanent zoning by the end of 2026. That means somewhere in that city, planners and building officials are right now trying to write objective standards for use you've never had to define. And that's hard-focused work. If your jurisdiction is anywhere near this, near power infrastructure, near cheap industrial land, near a fiber corridor, that clock may already be running for you, whether you've noticed it or not. You know, having said that, I've spoken with some of my counterparts in other jurisdictions, and I have truly been surprised at where these data centers are. In some instances, they're downtown San Jose, and in other instances they're out in the burbs, somewhere, some innocuous little spot that you never would have expected, just as I stated earlier, just you know, a nondescript building next to the freeway. As I'm doing this podcast, I'm educating myself and finding what makes a particular site very palatable, very desirable in terms of a data center. And third, this is the code enforcement angle, which is near and dear to my heart. A moratorium doesn't answer the question of what happens with the use that's already in the ground, or one that got approved and under an old label and nobody caught on. What do you do about that office that's actually a data center that was permitted three years ago and is now running diesel generators your air district never fully accounted for? That's not a planning problem anymore. It's a code enforcement problem. Here come my NPOs. Okay, so the elephant in the room that nobody really wants to address. Let's spend
some real time on the single biggest technical reality of a data center. The one your code framework absolutely did not anticipate. The power. And those of us up here in NorCal know that dealing with PGE, sometimes you have massive wait times and delays and everything else. But now you get this thing online and you have its ugly cousin, the backup diesel. Large data center draws power on the scale of a small city. It's not hyperbolt. And because these facilities absolutely cannot go down, the data center losing power is a catastrophe for the company running it. They build in massive backup generation. And historically, the backup have been diesel generators, lots of them. So remember our iniocurn, I'm struggling with that one, example. 40 diesel fire generator sets, up to 99 megawatts of backup power. Now think about what that means from an air quality perspective. What is that? 40 semi-tractor trailer trucks running at the same time in the same place? This is why air districts are getting involved and why environmental groups are petitioning them. Bay Area Air District specifically has been petitioned about diesel generators at data centers. California Air Resources Board has generator compliance requirements that a Danish Center's backup fleet has to meet. Now here's where I want to put on my building official hat and be very practical with you. When a project like this comes through, the electrical and the mechanical review is not quite routine tenant improvement review, right? It's not a TI. You're dealing with service entrances, switch gear at a scale most plant checkers rarely see. You're dealing with generator installations, fuel storage, fire life safety implications of large-scale diesel on site. You're dealing with cooling systems that are their own mechanical universe. Now, luckily in our jurisdiction, I feel that we have the resources to do these plan reviews and to do these inspections. I'm always talking up my crew, my team. We have a huge diversity in the portfolio of the projects that we've done here. So I feel very confident that we could pivot and take anything on. Anything we can't, we have an incredible cast of consultants that we could pull from. But these are very atypical. And for some jurisdictions, this may be a struggle. You know, as I'm talking about this, visualizing some projects that we have done where there is a backup generator on site and you have fuel spillage containment systems and so forth, and how some of our hazmat folks, which are housed at uh LPFD, a little more pleasant than fire, they're so tenacious. Sometimes they really get deep in the weeds and they really scrutinize the heck out of stuff. And I love that about them because at the end of the day, you're talking about something that can harm the environment or harm a lot of people. So I feel very fortunate in that regard. But this is quite a pickle. This this is new. It's going to be a learning curve, right? Because these things are not going away. They're just going to be more of them. And what's interesting is, and I'll get to that in a little bit, but how about mini nukes, mini nuclear reactors, some even portable nuclear reactors? Hmm. Is that more palatable than 40 generators? Let's talk about that in a minute. So, from an inspection perspective, this is going to be highly specialized, very unique, but I feel that my team can handle it. I'm not sure how other jurisdictions are geared for that. We're very unique in that my folks have done everything from hydrogen fuel production facilities, aircraft hangars, bus manufacturing, and the grandma and grandpa's bathroom remodel, right? So there's a huge delta in what our folks have had to learn and been able to do. But that also builds on the fact that we have some great plan reviewers and we're handed off a project where a lot of the guesswork, a lot of the grades have been taken out. Not entirely, but it's a great team effort. But when you look at something like this, when I look at the cooling perspective of this, that it's mind-boggling. And there are a lot of variables here. We're hearing a lot of water usage, and that's probably going to be an evaporative system. We'll get that into that a little bit more. Evaporative systems use less energy. You can do a closed loop system that would be similar to the cooling system in your car, but requires more energy. So now we have a higher burden of more of a load power demand. For a lot of jurisdictions, there are going to be some adjustments here. And whether that comes from the plan review side, the building inspection side, whether you're using consulting to bring people on board, but we're going to have to learn how to do some things. The takeaway for the segment: the power and the diesel are not a footnote. They're a defining feature of the building. And they cut across the electrical code, mechanical code, fire code, and air quality regulations all at once. If you treat a data center as a normal commercial project with a big electrical service, you've already missed the point. You know, it's kind of a joke with a lot of us in the building inspection review side, the energy code, green code. I'm not going to say that we don't enforce them, but in the grand scheme of things, they're the little brother to all the other codes.
Let's talk about what a lot of building officials have honestly never heard about. Because it lives at the state level, the California Energy Commission and something called small power plant exemption. Here's the setup. Because these facilities have so much on-site generation, remember, 99 megawatts of backup power and in your kernel, they can trip into the state level review process that has nothing to do with your local building permit. Under California law, the Energy Commission has exclusive authority to certify thermal generating facilities of 50 megawatts and larger. And for the really big ones, facilities over 100 megawatts, now you understand why the other plant was only 99. The project sponsor has to. Go through the CEC's full application for certification process, which includes public outreach, an evidentiary hearing, and a final vote and decision by the five-member commission. The AFC process is treated as a functional equivalent to a full environmental impact report under California Environmental Quality Act. Okay, so here is the interesting middle ground, the one you should really understand. For facilities under 100 megawatts, again, remember 99, a project sponsor can seek what's called a small power plant exemption, an SPPE. The CEC, there's a lot of acronyms and letters for you. The CEC may grant that exemption if, after its own review under CEQA and its regulations, it finds the facility won't create a substantial adverse impact on environment or on energy resources. Wow, that's a mouthful. And that is a loophole if I've ever heard of one. Okay, so I'm gonna beat that horse. Again, Inyokurn 99. You see why it's not 100. Wasn't an accident. It's just under 100 megawatts. It keeps it in the SPPE lane out of the full-blown AFC process. So you can see, and we all know, that these thresholds shape how these projects are designed. When there's a bright line in the law, applicants design right up to the edge. You know, it's the same behavior whether you're doing an ADU, an addition, we all know these things. Humans design right to the line. And quite frankly, if there is a loophole, there is a hard wall, there is some sort of benefit, why not take advantage of it, right? And here's a crucial point for those of us at the local level. Even after the project gets small power plant, what is that again? SPPE? Anyone remember? Hands? Anything? Small power plant exemption. So even if a project gets a small power plant exemption from the state, the developer still has to secure local, state, and federal permits before they can build and operate. Read that again. The state exemption does not exemption permit. It does not exempal land use approval. It does not make your fire marshal go away. You can't get our fire marshal to go away. Boy, you can't do that. And I want to flag one more thing. The small power plant exemption exemption matters. Depends on how you read the project. When a developer goes for a small power plant exemption, the Energy Commission still reviews it under the California Environmental Quality Act and its own regulations before granting it. So it's an exemption from the full application of fortification process. So it cuts out some red tape. But it's not an exemption from all the environmental review altogether. And after licensing, the commission has continuing duty to monitor compliance and certification conditions with all the federal, state, and local laws. That phrase, all local laws, is worth holding on to. The state process explicitly assumes your local requirements still apply. It's baked right into the framework. But don't get too excited. My personal belief being around as long as I've been and seeing how things operate, when the money gets significant enough, there are going to be laws and mandates that are going to circumvent anything that you're going to have to say at the local level. But maybe I'm just being a cynic. So the mental model I want to carry out of this segment is a layered one. There's a state layer, energy commission, triggered by generation capacity, 50 megawatts to just under 100. And there's a local layer, your zoning, your building, your fire codes, all the local approvals, which does not disappear just because the state is involved. These two layers coexist, and a sophisticated applicant will use the state process where it helps them and lean on your processes where you're underprepared to help them. Your job is to make sure the local layer is not the weak link. Be prepared.
Okay, so Sacramento's at it again. Now let's go through the state legislature because Sacramento has noticed and there's a cluster of bills aimed right at data centers, at their water, their energy, and who pays for the grid. And these are moving right now as we're recording. So in the final stretch of legislative session, let me walk you through the ones that matter. Let's start with state Senate Bill 886 from Senator Padilla. So this one is really about who pays for the grid. SB 886 would require Public Utilities Commission to establish a dedicated tariff. Ooh, the T-word. A special rate structure for data centers receiving transmission level service with peak demand at least 25 megawatts. And it goes further. It would make data centers bear full responsibility for the transmissions upgrades their interconnections trigger. Wow, they should pay for their own stuff. What a profound idea. Prefund a 15-year contract for new zero carbon energy. Participate in demand response programs and pay an early termination fee if they bail out within 15 years or don't hit their projected demand. Wow. So they're asking them to pay for what they're using. That's what I'm getting out of it. But we'll see if that one passes. On the surface, what that's saying is the whole thrust of the bill is if you're going to strain the grid, you pay for the strain, not the ordinary ratepayer down the street. I like that idea. We'll see what happens. Then there's Senate Bill 887 described as the companion to A886. Senate Bill 887 goes after the California Environmental Quality Act angle. It would confirm that CEQA categorical exemptions do not apply to data center projects. In other words, you can't just claim a routine categorical exemption to skip environmental review for one of these projects. At the same time, it would create an expedited judicial review pathway for projects that meet clean energy and water efficiency standards. So it's a two-handed bill. One hand says, no cheating on environmental review. The other hand says, but if you do it right and clean, we'll speed up the litigation exposure. And this one still lives in committee analysis as recently as late August. Then there's Assembly Bill 2619 from Assembly Member Diane Papen. And this one's about water. It's water resources bill aimed specifically at data centers, squarely at the concern we saw in the in Yokern project, where a facility wants tens of thousands of gallons a day out of a stressed groundwater basin. It cleared an assembly policy committee in the spring, and as of late August, it's still being tracked as active legislature. And there's a broader theme running under all these bills, which is that California is trying to figure out how to say yes on our terms to an industry that is coming, whether we like it or not. The AI boom is driving demand that isn't going to politely wait for us to write good rules. So legislature is scrambling to attach conditions, water efficiency, clean energy, cost responsibility to the things that already are at the door. Now, why does a building official care about bills that are mostly about tariffs and California Environmental Quality Act? And water. Every one of these bills, if it passes, changes the environment your permit lives in. If SB 887 confirms that categorical exemptions don't apply, that changes the sequel posture of a project sitting on your desk. If AB 2619 adds water requirements, that changes what has to be demonstrated before a project is real. These are not abstracts. They flow downhill and land on your permit file. Watch these and always keep an eye on Sacramento. Never know what those guys are going to do next.
You know, they say announce of prevention is worth a pound of cure. So this is a new animal for us. And it definitely is posing some problems. Jurisdictions are putting up moratoriums. There's some are trying to ban them outright. I don't know what success they're going to have with any of those things. I've had my hand in helping to craft some ordinances for our city to deal with new problems as they come up. And one of the things that you have to try to do is forecast what this beast is going to look like. How is it going to evolve? How might it mutate? Not enough to have indefinite terms. It's not good or bad. It's you have to keep this under 50 decibels or whatever, quantify it, put actual numbers to it. And then you also have to have repercussions. Ordinance, a stipulation, anything that doesn't have some sort of enforcement behind it, worthless. It's not even worth the paper it's written on. So we've had a couple of these issues. I'll give you a couple of them. We had a residential development go up, and it was right bordering some industrial. And when these folks purchase, they're presented with a document that tells them that, hey, you know that you're in an industrial area, that there's noise, and so forth. So the industrial was there first, the residential came second. People are provided with this disclosure, they purchase, and then code enforcement still gets, hey, these businesses are running at four o'clock in the morning, there are trucks, I can hear them backing up, forklifts, whatever. And really, did you not think about this when you purchased it? And the warehouse is right next to your house. Did you not think about this when you were given this disclosure document? So these things are going to happen. Be prepared. This is, again, a new animal, and we have to deal with it. We have another warehouse that came in after the development, after the residential. Folks knew what was going to happen, and you know, there were some stipulations put on the warehouse as in terms of when they can operate, those backup sounds that the trucks and the forklifts make, when they can use them, how they have to be muted, so forth. And you still have instances where I forgot, oh, the truck made noise, and those are going to be there. The data centers are at a cursory look are going to be presenting problems that are going to be exponentially worse because you could be looking at severe air quality issues. Imagine if you had those 40 generators, you have this data center right up the street from you, and there's a power outage, or perhaps the grid is not sufficient to provide power. They have to run their auxiliary generation in order to keep this beast running, and you have all this diesel going on. True story. California, a few years ago, we had a lot of fires, a lot of power outages. And I have a family member who across the street has a contractor, commercial contractor, and they had one of those large diesel generators in their driveway powering their house for four days while the neighborhood was dark. My family member was quite salty because you can imagine a diesel engine running 24 hours a day for about four days straight, diesel exhaust noise, whatever, right? So people do strange things. So again, you're gonna have to be fortune teller to some degree. Try to forecast what the problems are gonna be, try to build in solutions and safeguards before you get there. The data centers are coming, there's no way around this. This is progress. So, how do we fix this?
One of the things that I mentioned earlier is different types of power production. You have diesel generators, you have natural gas generators. Again, cursory look, which one's better? There are pros and cons to the two. Perhaps a natural gas is an option. I'm not sure that it is. They produce slightly less pollutants, but they produce different types of pollutants. So that's a problem. Do you want a mini nuke in your neighborhood, in your community? A lot of people you think of nuclear power is on the rise, folks. Be advised. And there's a reason for that. Nuclear power has got a bad rap. I believe last time I researched this, the United States Navy had commissioned close to 500 ships, 500 vessels that were nuclear powered. I can't remember ever hearing of an accident. Now you know that our federal government is extremely transparent and forthcoming. And if something like that happened, they would definitely tell us. So if they're 500-0 and they have a perfect batting record in terms of nuclear power safety, I think we've gotten to the point where it might be a viable option. I mentioned closed loop as opposed to open and evaporator type cooling earlier. I did an inspection on a project, industrial project in Livermore. And in order to offset their energy costs, there was a whole math problem. But they put up a lot of batteries, and they were loading the batteries off the grid after hours and getting a lower rate, and then using that power during the day. So they were shaving their costs. The point I'm trying to make there is that these batteries were liquid-cooled, and it was the first time I'd ever seen anything like this. That's an option. I don't know to this capacity, and we're talking about a huge amount of power. I don't know that batteries are an option yet, but perhaps some sort of an alternative power source. We human beings are great problem solvers, problem creators, but problem solvers. And, you know, this might seem daunting now, but I'm sure that we're going to figure out a way to make this more efficient, tax our resources less, because let's face it, there's a huge demand for us to all be able to make our own little animated dog do weird things and talk. And I'm not about to give that up. So let's figure out a way to make these data centers happen, more of them. I've been noticing that AI has been evolving in the short time that we've been using AI, it has gotten exponentially better, faster. So let's continue to do that. I think it's going to be a great tool for all of us, for the mundane tasks and for the I guess solving some of our real serious problems. And I think that we in the building departments can help be a part of that solution. Because while everybody thinks of AI as this mystical thing that just floats around, we know where it lives. We know what it needs. It needs shelter, it needs a big shelter. It's ravenous, it needs to be fed, it needs to be cooled and comforted, I guess. So that's where we come into play. And we make sure that all those components come together and we keep our community safe and we make this thing function properly. Okay, let's
recap and put together a game plan. Number one, find out where your jurisdiction stands on data centers. Do you have a classification? Do you have standards? Do you have moratoriums? Do you know what you're doing at all? If you don't, start planning. Get on it. Number two, data center application anywhere on the horizon. Get your team ready and review actually what you need. Number two, is there a data center application anywhere on your horizon? If there is, look at what's actually there. Don't assume office light industrial. Look at it closely. Epistemic humility is huge here. Don't be afraid to say, I don't know, or perhaps I was wrong in how I viewed this. This is a different animal, and it's a big animal. This could be Godzilla. You need to educate your team and you need to bring in professionals when you need to shore up your staff. There's nothing wrong with that. So look at it properly, get the right people to look at it. Number three, you've looked at your plan review, you've done all your electrical, mechanical, fire, all that stuff has been looked at. Now it's going in the field. Let's make sure that our inspection staff knows what is expected of them. Going out in the field and finding something that you've never seen before is the wrong time to see it. You need to be well-versed, educated, you need to do your homework before you leave the office. And that's where collaborating with the front side of the building department, the plans counter, the people that are doing the plan reviews, the people that are doing the research on paper or digitally, and preparing the staff for when they go out in the field. Something else that I'd like to throw in there, and something that we use a lot, is when we run into something new, we reach out to jurisdictions that have been there, done that. There's no reason why you need to reinvent the wheel. It's great when somebody else has blazed the trail. They can tell you what the pitfalls are, they can tell you what they would do differently had they were to do it again, and valuable resource. So I think that we all need to collaborate. Those of us that already have data centers, hey, let's share the knowledge, share the wealth, let the rest of us know what works, what doesn't, and what we should be aware of. Next, keep your eyes on those folks in Sacramento. Again, they may be the most well-meaning, best intentions ever. They are not us. We have the technical expertise, we have the history, we know how this stuff comes together. I think we need to be more involved, but I've also spoken to folks that have gone up to Sacramento and tried to get involved and not received very well. We have to keep pushing because at the end of the day, we're the ones that are going to have to enforce whatever gets passed. And some of those regulations are well-meaning and but they require a lot of fine-tuning and adjusting over time. And if we can do that faster and not have the pitfalls up front, it would be a better way to go. So again, keep your eye on Sacramento and try to push your input as much as possible. When you folks are doing the plan reviews, when you're writing your ordinances, you're doing all those things, I want you to keep your code enforcement staff in mind. Because when this goes wrong, when it goes bad, they're the ones that are going to have to deal with it. Like I said, try to forecast the problems. When you forecast the problem, forecast the solution, the remedies that's going to give your code enforcement team something to work with, as opposed to, well, you're doing something that's in violation, but I really have no enforcement mechanism. So bad boy, bad girl, and that's it. And just keep doing what you're doing. That doesn't work. Collaborate with those folks because they're going to be able to tell you how to put teeth in whatever you're drafting. So I think that's all I've got for this one. I think I've scared you enough. I think I've enlightened you enough, maybe. This is a new arena. We need to be prepared and embrace it. I have a lot of faith in all you folks. I am so impressed with the talent pool that's out there. I can't say enough about my Livermore team. Front office, back office, people in the field, code enforcement, plan reviewers, permatex, just amazing people. And when I get the opportunity to go hit a Calbow or an ICC and I meet some of you from some of those other jurisdictions, or when I run into a roadblock and I call a neighboring jurisdiction to find out how other folks are doing it, we do an incredible job. I'm not trying to pat myself on the back, but you do so much and people don't realize. So good for you. I think we can handle this. We'll show these software people how we can build a containment system for this Godzilla AI that they're building. As always, this podcast episode is general education and commentary, not legal advice. So there is that. I've done my disclaimer. Hey,
thanks for listening. If you have a moment, share the episode, throw us a like, whatever you'd like. In any event, I wish you all the best. Continued success. Take care.
