PG&E Data Center Demand Pipeline Swells to 10 Gigawatts with Potential to Unlock Billions in Benefits for California

Rhea-AI Summary

PG&E (NYSE:PCG) announced its data center project pipeline has expanded to 10 gigawatts (GW) of new electricity demand over the next decade, up from 8.7 GW in May and 5.5 GW in February. This capacity could power approximately 7.5 million homes.

The company projects this growth could reduce customer electric bills by over 10% and generate significant economic benefits, including 65,000 permanent jobs and up to $4.75 billion in tax revenues. Of the total pipeline, 1.5 GW from 17 projects are in the final engineering phase, expected to begin operations between 2026-2030.

Additionally, the California Public Utilities Commission (CPUC) approved PG&E's interim Electric Rule 30, allowing large-load customers to fund transmission infrastructure upfront for faster grid connections.

Positive

• None.

Negative

• Current grid utilization rate is only 45% on average
• Significant infrastructure investment needed to support the increased demand

Insights

Utility Industry Analyst

PG&E's data center pipeline growth to 10GW could reduce customer bills by 10% while generating billions in economic benefits.

PG&E's announcement of a 10 gigawatt data center demand pipeline represents a remarkable 82% increase from the 5.5GW reported just five months ago in February. This extraordinary growth trajectory showcases the accelerating AI-driven data center boom sweeping across PG&E's Northern California territory.

The most significant aspect of this development is the potential for 10% lower electric bills for all PG&E customers through increased grid utilization. Currently, PG&E's infrastructure operates at only 45% capacity on average. By spreading fixed costs across substantially higher energy usage, the utility can improve operational efficiency while delivering customer savings.

The CPUC's approval of the interim Rule 30 implementation represents a critical regulatory breakthrough. This mechanism allows data center developers to fund transmission infrastructure upgrades upfront in exchange for expedited grid connections – essential in an industry where time-to-market is a competitive advantage. This approach effectively transfers financial timing risk from ratepayers to developers while accelerating economic benefits.

Looking at the execution timeline, 1.5GW from 17 projects are already in final engineering phases, with operations expected between 2026-2030. This near-term pipeline validation increases confidence in PG&E's ability to execute on the full 10GW projection. The geographic diversity of these projects across the Bay Area, Central Valley, and Sacramento regions demonstrates expanding data center interest beyond traditional Silicon Valley locations, likely driven by land availability and potentially favorable local incentives.

The projected economic multiplier effects – including 50,000 construction jobs, 5,000 permanent tech positions, and billions in tax revenue – represent substantial economic development opportunities for California communities still recovering from pandemic-related disruptions.

CPUC Approves Interim Rule for PG&E to Accelerate Grid Connections for Large Loads

OAKLAND, Calif., July 31, 2025 /PRNewswire/ -- Pacific Gas and Electric Company (PG&E) today shared that it is proactively working to serve 10 gigawatts (GW) of new electricity demand from data center projects over the next ten years—that's enough energy to power approximately 7.5 million homes simultaneously.

The 10 GW in PG&E's data center project pipeline reflects a significant increase from the 8.7 GW of data center demand PG&E reported in May and the 5.5 GW the company reported in February. 

This milestone includes the results of PG&E's April 2025 study of data center applications from across its 70,000 square mile service area.

"Data centers are powering more than just the digital world—they're helping power California's future and PG&E is proud to lead the way in meeting growing demand for data centers," said Mike Medeiros, Vice President, South Bay Delivery, PG&E. "This growth can help lower costs for all electric customers while creating tens of thousands of jobs and billions in local revenue."

Delivering Benefits for Customers and Communities

PG&E estimates the 10 GW of anticipated data center load growth could lead to:

• Lower customer electric bills by 10% or more by spreading fixed costs across more energy usage¹
• Create 50,000 construction jobs and 115,000 associated support jobs
• Add 5,000 permanent tech jobs and 28,500 permanent support roles
• Generate $1.25 to $1.75 billion in increased property tax revenue
• Contribute $2.5 to $3 billion in additional sales tax revenue

Of the 10 GW, 17 data center projects totaling approximately 1.5 GW are in the final engineering phase (the last step before project construction starts) and projected to begin operations between 2026 and 2030. Most of these are in San Jose, Silicon Valley and the greater San Francisco Bay Area, but some are also in the Central Valley and Sacramento.  

Growth in data center demand is good news for all PG&E customers. 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 1-2% on their monthly bill in the long term, while serving those customers with some of the cleanest electricity in the United States.

New energy demand from data centers allows PG&E to utilize more of its existing power infrastructure. Today, PG&E's grid is 45% utilized on average. By spreading the fixed costs of operating and maintaining the grid over more units of energy, PG&E can increase the average grid utilization rate and each customer's dollar can go further.

CPUC Approves Interim Implementation of PG&E's Rule 30 Large Load Proposal

In addition to data centers, PG&E is getting more applications to power large, new loads including from warehouses, electric vehicle fleets and manufacturing growth. To support this surge in large-load interconnection requests the California Public Utilities Commission (CPUC) has approved PG&E's proposal for interim implementation of Electric Rule 30.

Rule 30 provides a streamlined, transparent, and equitable pathway for transmission-level retail electric service. Under the interim rule, applicants who agree to fund necessary transmission infrastructure upfront can benefit from accelerated grid connections.

"Our large-load customers have asked for the ability to fund their projects upfront, which helps us serve them faster," Medeiros said. "We greatly appreciate the Commission's decision to implement an interim approach while the permanent process is finalized. This is a great step forward and solid recognition of the importance of Rule 30."

PG&E is committed to working with regulators, developers, and communities to ensure this growth is sustainable and beneficial for all Californians.

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 Central California. For more information, visit pge.com, pge.com/news and pge.com/innovation.

_______________________________

1 Actual results could differ materially from this forecast depending on interconnection costs, the amount of power used by customers, the price of power, and the amount of cost recovery approved in ratemaking proceedings.  Assumes additional power supply costs from serving new data center load are not borne by other customers.

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/pge-data-center-demand-pipeline-swells-to-10-gigawatts-with-potential-to-unlock-billions-in-benefits-for-california-302518859.html

SOURCE Pacific Gas and Electric Company

FAQ

What is PG&E's (PCG) current data center demand pipeline as of July 2025?

PG&E's data center demand pipeline has reached 10 gigawatts (GW), enough to power 7.5 million homes, increasing from 8.7 GW in May and 5.5 GW in February 2025.

How will PG&E's data center expansion affect customer electricity bills?

PG&E estimates that customer electric bills could be reduced by 10% or more by spreading fixed costs across more energy usage. For every 1 GW of new data center demand, customers may save 1-2% on monthly bills.

What economic benefits will PG&E's data center growth bring to California?

The expansion is expected to create 165,000 construction and support jobs, 33,500 permanent jobs, and generate up to $1.75 billion in property tax and $3 billion in sales tax revenue.

What is PG&E's Electric Rule 30 and how does it affect data center development?

Electric Rule 30 is a CPUC-approved interim rule that provides a streamlined pathway for transmission-level retail electric service, allowing customers to fund infrastructure upfront for faster grid connections.

How many PG&E data center projects are in final engineering phase?

17 data center projects totaling 1.5 GW are in the final engineering phase, scheduled to begin operations between 2026 and 2030, primarily in San Jose, Silicon Valley, and the greater San Francisco Bay Area.