The California Energy Commission (CEC) has exclusive jurisdiction to review, and approve or deny, applications to construct and operate thermal and geothermal power plants and their related facilities, such as transmission to and from the power plant, that generate 50 MW or more, as provided under the Warren-Alquist Act.
Pursuant to Public Resources Code section 25541, power plant projects that can generate more than 50 MW but less than 100 MW, developers may apply for a Small Power Plant Exemption (SPPE). As the lead agency under the California Environmental Quality Act (CEQA) and under the California Code Regulations Title 20, if the CEC determines that the proposed project would not create a substantial adverse impact on the environment or energy resources, it may grant this exemption. Upon granting SPPE, the local land use agency, typically the county or city government with jurisdiction over the project site, assumes permitting authority for the project. If the application for the SPPE is denied, the project applicant would be required to file an Application for Certification (AFC) with the CEC.
Applicants requesting a SPPE must reimburse the CEC’s actual cost to prepare and process a negative declaration, mitigated negative declaration, or environmental impact report pursuant to the California Environmental Quality Act. A deposit is required at the time of filing. If costs exceed the deposit, the applicant will be billed for the difference. A refund will be provided if the costs are less than the deposit. There is no annual compliance fee since the CEC is not licensing the project if the small power plant exemption is granted.
As the lead agency under the California Environmental Quality Act (CEQA), the CEC reviews an SPPE application and prepares the appropriate environmental document; for example, an environmental impact report or a mitigated negative declaration. The CEC can approve an exemption if it finds that the proposed facility would not create a substantial adverse impact on the environment or energy resources. If the CEC approves the exemption, the project developer is responsible for securing local, state, and federal permits to construct and operate the plant. Local and state agencies will consider the environmental document prepared by the CEC for any discretionary decisions subject to CEQA.
On May 26, 2026 - PDF, the CEC adopted regulations to amend the definition of related facility and add a definition of an appurtenant facility. These updates to Title 20, California Code of Regulations, section 1201, clarify:
- Generation may be jurisdictional
- Electrical equipment connecting generation may be jurisdictional
- Data center buildings are not jurisdictional, even if they are served by a CEC-jurisdictional energy facility
The CEC does not permit data centers but does have jurisdiction over certain energy infrastructure associated with them under its exclusive permitting authority to certify all thermal generating facilities 50 megawatts (MW) and larger in California. While most data centers rely on the electric grid as their primary source of power, they typically require on-site electricity generation for backup power, most commonly diesel-powered generators. These backup generators only run during emergencies, testing, and maintenance, but still require permits to build and operate.
The CEC is authorized to apply application fees pursuant to Public Resources Code, Division 15, Chapter 6, sections 25500-25543; California Code of Regulations, Title 20, Division 2, Chapter 5, and California Code of Regulations, title 20, section 2300.1. Learn more about the application fees and deposit on the CEC Licensing and Compliance webpage.