PG&E's Ambitious Plan: 10 Gigawatts of Power Demand from Data Centers to Revolutionize California's Energy Landscape

PG&E's Vision for Data Centers in California

Pacific Gas and Electric Company (PG&E) has recently made headlines with an ambitious plan aimed at meeting the burgeoning demand for electricity from data centers across California. With projections estimating a staggering 10 gigawatts (GW) of new electricity demand over the next decade, PG&E is setting the stage for transformative change in the state's energy landscape.

The 10 GW target is not just a number; it reflects an increase from the 8.7 GW reported in May and the earlier figure of 5.5 GW from February. This upward trend is based on PG&E's findings from a detailed study conducted in April 2025, which analyzed data center applications throughout its vast service area of 70,000 square miles.

Empowering California's Future

Mike Medeiros, Vice President of South Bay Delivery at PG&E, emphasized the significance of this growth, stating, "Data centers are powering more than just the digital world—they're helping power California's future." The commitment not only responds to increasing demand but is also hoped to bring broader benefits to all electricity users. By accommodating larger loads, PG&E anticipates reducing electricity bills by at least 10% for its customers through the more effective distribution of fixed costs associated with electricity provision.

As PG&E gears up for this growth, it is projected that the anticipated increase in data center loads will create an unprecedented number of jobs. Specifically, it is estimated that over 50,000 construction jobs and about 115,000 associated support jobs will be formed during this process, along with adding approximately 5,000 permanent tech positions and over 28,500 support roles.

In monetary terms, PG&E forecasts this initiative will significantly buoy the local economy, generating $1.25 to $1.75 billion in additional property tax revenue and contributing a solid $2.5 to $3 billion in increased sales tax revenue.

The Current Landscape

Currently, there are 17 data center projects totaling around 1.5 GW in the final engineering phase, expected to kick off operations between 2026 and 2030. Many of these initiatives are located in tech hubs like San Jose and Silicon Valley, with additional projects mapped across the Central Valley and Sacramento.

Moreover, the overarching impact of this growth extends beyond the immediate financial advantages. PG&E’s commitment to serving data center clients will also enable it to enhance the utilization of its existing infrastructure. At present, the grid operates at an average utilization rate of only 45%. Through additional demand, this rate can increase, offering greater efficiency and value for each customer.

Innovations in Large Load Transmission

In light of the escalating demand, PG&E has also seen a surge in requests for assistance from large-load customers, including warehouses and electric vehicle fleets. To facilitate the growing needs of these sectors, the California Public Utilities Commission (CPUC) has approved PG&E's Electric Rule 30 proposal. This interim rule enables customers to expedite grid connection by funding necessary transmission upgrades upfront, thereby ensuring faster service delivery.

Medeiros expressed gratitude for the decision, highlighting that it acknowledges the urgency and importance of effectively managing large electricity loads. "Our large-load customers have asked for the ability to fund their projects upfront, which helps us serve them faster," he said.

As regulators, developers, and communities align their efforts, PG&E is dedicated to ensuring sustainable growth that benefits all Californians. By investing in the future of energy provision, PG&E is not only boosting its capacity but also contributing to the state's economic resilience amidst an era of digital transformation.

Conclusion

As PG&E leads the charge in expanding the capacity of California's electrical grid, the company stands on the brink of significant economic and environmental impact. This multi-faceted approach could redefine how energy is consumed and managed, ensuring a prosperous and efficient future for all residents of California.