Surging Data Center Growth to Help Lower Energy Costs for PG&E Customers

Rhea-AI Summary

PG&E (PCG) reports a significant surge in data center electricity demand, projecting 8.7 gigawatts (GW) of power needs over the next decade, up from 5.5 GW in late 2024. The utility is currently managing 18 new data center projects totaling 1.4 GW in the final engineering phase, scheduled for operation between 2026-2030. Additionally, 21 new project applications totaling 4.1 GW are under review.

A key benefit for customers: every 1 GW of new data center demand could reduce monthly electric bills by 1-2%. Projects are primarily located in Silicon Valley and the Bay Area, with some in the Central Valley and Sacramento. PG&E is conducting a comprehensive study across its 70,000-square-mile service area and partnering with Westbank on a net-zero community project in San Jose.

AI-generated analysis. Not financial advice.

Positive

• Every 1 GW of new data center demand could reduce customer bills by 1-2%
• Strong growth in data center demand with 8.7 GW projected over next 10 years
• 18 new data center projects (1.4 GW) in final engineering phase
• Additional 21 new project applications totaling 4.1 GW under review
• Better infrastructure utilization will improve cost efficiency

Negative

• None.

News Market Reaction – PCG

-0.88%

1 alert

-0.88% News Effect

On the day this news was published, PCG declined 0.88%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Every 1,000 MW (or 1 GW) of New Electric Demand from Data Centers Could Decrease Monthly Electric Bills by 1-2% 

SAN JOSE, Calif., May 27, 2025 /PRNewswire/ -- Pacific Gas and Electric Company (PG&E) is seeing a huge jump in the amount of electricity needed for new data centers. These centers, which power things like cloud storage and artificial intelligence (AI), are expected to need about 8.7 gigawatts (GW) of electricity over the next 10 years. That's a big increase from the 5.5 GW PG&E reported at the end of 2024.

To give an idea of how much power that is—just 1 GW can power around 750,000 homes at the same time. PG&E is also proud to be the host utility for this week's DTECH Data Centers & AI Conference in San Jose. The event brings together leaders from tech, government, and energy to talk about meeting the growing power needs of AI and data centers.

PG&E leaders will speak on topics like:

• How AI is changing energy use
• How to speed up power delivery to data centers
• How to work better with developers and communities

Mike Medeiros, Vice President, South Bay Delivery, PG&E, participates in the opening keynote today with several other utility executives to discuss load growth, reliability, and equitable data center expansion.

"What differentiates the opportunity for data centers in California is a diversified set of customers and projects, excess clean power supply, and a regulatory approach which ensures that our existing residential customers will save money," Medeiros said. 

Of the 8.7 GW, PG&E is working on 18 new data center projects totaling approximately 1.4 GW that 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 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. By spreading the costs over more units of energy, each customer's dollar can go further. 

Looking Ahead: More Projects Across California

After a successful study of data center needs in Silicon Valley last year, PG&E is now doing a follow-up study across its entire service area—70,000 square miles of Northern and Central California.

In addition to the current 8.7 GW in PG&E's data center project pipeline noted in its first quarter 2025 earnings report, PG&E received 21 new data center project applications through its follow-up cluster study (launched in April 2025) totaling approximately 4.1 GW of additional power demand. PG&E is actively working with these customers through the end of the year to scope and finalize their requests.

By grouping applications and projects together, rather than individually, PG&E can plan better, save money, and connect customers faster.

PG&E is also working with real estate developer Westbank on a new net-zero community in downtown San Jose. Construction has started on infrastructure upgrades, and Westbank is now looking for data center partners to join the project.

To learn more about PG&E's plans for the future, including how it is accelerating connecting data centers and other large loads, visit www.pge.com/innovation.

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 and pge.com/news 

View original content to download multimedia:https://www.prnewswire.com/news-releases/surging-data-center-growth-to-help-lower-energy-costs-for-pge-customers-302466332.html

SOURCE Pacific Gas and Electric Company

FAQ

How much could PG&E (PCG) customers save on their electric bills from data center growth?

PG&E estimates that for every 1,000 MW (1 GW) of new electric demand from data centers, customers could save 1-2% on their monthly electric bills in the long term.

How many gigawatts of data center power demand is PG&E (PCG) projecting over the next 10 years?

PG&E is projecting 8.7 gigawatts (GW) of data center power demand over the next 10 years, up from 5.5 GW reported at the end of 2024.

How many new data center projects is PG&E (PCG) currently working on?

PG&E is working on 18 new data center projects totaling 1.4 GW in the final engineering phase, plus reviewing 21 new project applications totaling 4.1 GW of additional power demand.

Where are PG&E's (PCG) new data center projects located?

Most of the new data center projects are located in Silicon Valley and the greater San Francisco Bay Area, with some projects in the Central Valley and Sacramento.

When will PG&E's (PCG) new data center projects begin operations?

The 18 data center projects in the final engineering phase are projected to begin operations between 2026 and 2030.