SAN JOSE — PG&E is being flooded with requests for new data centers as big tech’s hunger for energy intensifies amid the artificial intelligence boom, a surge that could ease the jumps in monthly customer bills.
The utility titan said it already is studying requests for new data centers that combined would require 8.7 gigawatts of electricity to operate.
This might just be the start, however, as PG&E extends what is evolving into a dramatic and wide-ranging investment in downtown San Jose in particular and the South Bay overall.
Big customers are interested in getting approval from PG&E to connect data centers that would consume another 4.1 gigawatts of electricity, according to Mike Medeiros, PG&E vice president of South Bay Delivery.
“We are really excited about this,” Medeiros said. “There are multiple benefits to this.”
For every gigawatt of new data center load, customer bills could decrease by 1% to 2% in the coming years, in PG&E’s view.
Why? PG&E has certain fixed costs to operate its electricity system and grid. If those fixed costs can be increasingly spread out over more mega customers, residential customers could see reduced bills to cover their share of the embedded expenses.
Of the 8.7 gigawatts, PG&E said it’s working on 18 new data center projects that together total roughly 1.4 gigawatts.
One gigawatt of electricity, for perspective, can provide power for 750,000 homes.
These 18 data hubs are in the final engineering phase. Final engineering is the step that immediately precedes the launch of project construction.
These 18 data centers are expected to begin operations between 2026 and 2030.
“Most of these are in Silicon Valley and the greater San Francisco Bay Area, but some are also in the Central Valley and Sacramento,” PG&E stated.
PG&E says that its efforts to upgrade, renovate and expand its electricity system can also help tech companies proceed with major development endeavors.
One of these endeavors is Google’s currently paused Downtown West neighborhood near the Diridon train station and SAP Center in downtown San Jose.
“We are working with Google to understand their plans for Downtown West and their power needs,” Medeiros said. “We are hyper-focused on making sure we build out the infrastructure to meet that growth.”
Oakland-based PG&E also is attempting to find short-term solutions to the stunning potential jump in electricity use in the South Bay and other parts of the Bay Area.
PG&E has struck a deal with Smart Wires, a North Carolina-based company that provides technology and services to quickly upgrade the capability of power plants.
In this instance, the Smart Wires technology will be deployed to increase the capacity of PG&E’s Los Esteros Energy Center in north San Jose’s Alviso district. The Los Esteros substation can be glimpsed near the interchange of State Route 237 and Zanker Road on the north side of the highway.
Smart Wires will deploy cutting-edge power flow control devices to help PG&E mitigate thermal overloads, redirect power flow, and increase available capacity at its Los Esteros electric substation.
“As the demand for data centers skyrockets, ensuring a reliable and efficient grid is more important than ever,” said Joanna Lohkamp, Smart Wires chief executive officer. “Our work with PG&E demonstrates the significant impact of our SmartValve technology, redirecting power from overloaded to underutilized lines.”
PG&E estimates that it can boost capacity by more than 100 megawatts at the Los Vaqueros substation by installing the Smart Wires technology.
Tech titan Microsoft plans two data centers in north San Jose, including one in Alviso, while a private developer has proposed another data center, also in Alviso.
“Customers are feeling confident with PG&E,” Medeiros said. “There was a perception at one time that PG&E wasn’t going to be able to keep up with the growth in California. Now you see continued interest in big customers being able to site within the PG&E service territory.”