PG&E Accelerating Connection of New Data Centers throughout Northern and Central California
Rhea-AI Summary
PG&E is expanding its capacity to serve approximately 5.5 gigawatts (GW) of new data center energy demand over the next decade, with 1.4 GW projected to come online between 2026 and 2030 from 15 customers across 27 sites. The company's initial cluster study in 2024 evaluated 740 megawatts of new data center load in Silicon Valley and the greater San Francisco Bay Area.
For every 1 GW of new data center demand, PG&E estimates customers could save 1-2% on monthly bills long-term. The company has proposed a new 'Rule 30' tariff to the California Public Utilities Commission, establishing a streamlined process for connecting large demand customers. This tariff allows customers to fund projects upfront and receive reimbursement after coming online, protecting existing customers while enabling infrastructure growth.
Positive
- Expected 5.5 GW new data center demand over next decade
- 1.4 GW confirmed for 2026-2030 from 15 customers across 27 sites
- Projected 1-2% reduction in customer monthly bills per 1 GW of new demand
- New tariff proposal enables customer-funded infrastructure expansion
Negative
- None.
Insights
PG&E's ambitious data center expansion strategy represents a pivotal shift in utility business models, positioning the company at the forefront of the AI and cloud computing revolution. The planned 5.5 GW capacity addition, with 1.4 GW coming online by 2030, demonstrates exceptional foresight in capitalizing on Silicon Valley's explosive data center growth.
The proposed Rule 30 tariff is particularly innovative, introducing a cost-sharing mechanism that benefits both new and existing customers. By allowing large customers to fund their infrastructure upfront with reimbursement provisions, PG&E creates a win-win scenario: accelerated project timelines for data centers while protecting existing ratepayers from stranded asset risks. The projected 1-2% reduction in monthly bills per GW of new demand showcases how economies of scale in utility operations can benefit the entire customer base.
The cluster study approach for managing 27 unique sites represents a significant operational efficiency improvement. By evaluating 740 megawatts of new load collectively rather than individually, PG&E can optimize grid investments and reduce connection timelines. This methodology aligns with modern utility best practices for managing distributed energy resources and large-scale grid modifications.
The strategy's broader implications extend beyond immediate financial benefits. PG&E is effectively positioning itself as the utility partner of choice for the tech industry's expansion, particularly important as AI workloads drive unprecedented demand for data center capacity. The focus on clean electricity supply aligns with tech companies' sustainability goals, creating a compelling value proposition for future growth.
New Energy Demand from Data Centers to Help Lower Costs for Electric Customers
'Rule 30' Tariff Proposal Establishes a Streamlined, Equitable Process for Connecting Large Demand Customers like Data Centers and Tech Campuses
To put this in perspective, 1 GW is enough power to serve the demand of about 750,000 homes at once.
The 1.4 GW of new data center load comes from 15 customers and represents 27 unique sites.
New data center load expected to come online over the next five years includes 740 megawatts that PG&E evaluated through its original cluster study in 2024. This load represents projects located in Silicon Valley and the surrounding communities of the greater
PG&E estimates for every 1,000 MW (or 1 GW) of new electric demand from data centers it serves, PG&E electric customers may save between 1
PG&E launched the cluster study to better respond to customers' needs when it comes to large loads like data centers. The study aimed to more efficiently meet customers' energy needs and timelines. By grouping applications and projects together, rather than individually, PG&E can more quickly confirm the demand and get these customers connected.
"PG&E is taking a thoughtful, deliberate process of pursuing load growth and we see a clear path to lowering customer bills as a result of adding what we call beneficial load," said Jason Glickman, executive vice president, Engineering, Planning and Strategy, PG&E. "Electricity growth from data centers allows us to better utilize our existing electric infrastructure as we build what's needed and deliver more per customer dollar. We are excited to be partnering with these customers, serving the innovation capital of the world, and doing so in a way that positively impacts Californians."
Rule 30 Tariff
In addition to data centers, PG&E is getting more applications to power other large, new loads including from warehouses, electric vehicle fleets and manufacturing growth.
As a result, PG&E recently submitted a proposal to the California Public Utilities Commission for a streamlined, transparent and equitable way to connect new electric retail transmission customers like data centers and large tech campuses.
Modeled after existing rules for distribution customers, the new Rule 30 tariff clearly outlines the interconnection process, cost requirements, and how customers can recoup their up-front costs if the load growth materializes.
"Our large load customers have asked for the ability to fund their projects upfront, which would help accelerate PG&E's ability to serve them, and Rule 30 proposes just that. The premise is to more efficiently and uniformly address these type of electric service requests and improve PG&E's ability to meet customers requested in-service dates by enabling them to fund their projects upfront and get paid back after they come online. That way, our existing customers benefit when the load comes in but are protected from having to pay for infrastructure if the load doesn't materialize on the expected time frame," Glickman explained.
PG&E anticipates the steady demand growth from its large load transmission customers including data centers will help to lower PG&E electric rates by spreading costs over more units of energy and will improve reliability for all customers.
Visit www.pge.com/innovation to access PG&E's R&D Strategy Report and learn more about PG&E's approach to serving anticipated load growth.
PG&E is proud to serve as the host utility for the upcoming DTECH Data Centers and AI conference May 27-29, 2025, in
About PG&E
Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE: PCG), is a combined natural gas and electric utility serving more than sixteen million people across 70,000 square miles in Northern and
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SOURCE Pacific Gas and Electric Company
FAQ
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