The county seat of Santa Clara is touting its partnership with Pacific Gas & Electric, claiming the city is \u201cthe West Coast\u2019s premier destination for data center development.\u201d The investor-owned utility now estimates it has enough capacity in its planning pipeline to push the city\u2019s electricity use to almost three times its current peak.<\/p>\n
Those plans are forcing major grid upgrades, PG&E and city officials say, while raising questions about who pays for them and whether the state can keep the power clean.<\/p>\n
Panelists at a CalMatters event in downtown San Jos\u00e9 clashed over key issues. They included a local official working with PG&E on the city\u2019s data-center build-out, a tech advocate urging California to seize the economic moment, a Stanford energy expert pressing for a more modernized grid and a utility watchdog skeptical of AI\u2019s promised benefits.<\/p>\n
Their discussion centered on how quickly California should move to accommodate new demand, what information the public should be entitled to and how to keep customers from shouldering the cost of infrastructure that may never be fully used.<\/p>\n
Proposals to more strictly regulate data center development died in the Legislature this year. Going forward, several state agencies and commissions are expected to take up further discussions, including the California Energy Commission, the Little Hoover Commission and the California Public Utilities Commission.<\/p>\n
How much energy will California\u2019s new data centers actually need?<\/p>\n
The surge in AI is complicating efforts by regulators and utilities to forecast how quickly data centers will grow and how much power they\u2019ll need. Companies can propose large facilities without committing to build them, the computing demands behind AI are changing quickly and cooling needs vary across the state. These factors make long-term energy needs hard to pin down.<\/p>\n
According to the state\u2019s electricity-demand forecast<\/a>, utilities report that data centers, in planning documents, have requested 18.7 gigawatts of service capacity. That\u2019s enough to power roughly 18 million homes, compared with California\u2019s estimated 14 to 15 million. Regulators don\u2019t expect all of those projects to be built, and assume the ones that do will come online gradually and operate at less than their requested capacity, producing a forecast of between 4 and 6 gigawatts by 2040.<\/p>\n Liang Min, who directs Stanford\u2019s Bits & Watts Initiative, and a speaker on CalMatters\u2019 panel, said that forecasting is particularly tough because companies are rolling out new AI apps \u2014 or \u201capplication layers,\u201d as he put it \u2014 at breakneck speed. They include products like ChatGPT that use large language models. No one knows which apps will take off, and those uncertain bets are driving huge demands on the power grid.<\/p>\n \u201cRight now we\u2019re really struggling,\u201d Min said. \u201cThe risk is extremely high in the application layers.\u201d<\/p>\n The Public Advocates Office, an independent consumer watchdog within the California Public Utilities Commission, recently warned<\/a> that rapid data-center growth could leave Californians paying for billions of dollars in grid upgrades if projects never materialize or use far less power than promised.<\/p>\n \u201cRatepayers could end up paying for costly infrastructure upgrades that may not be needed for many years \u2014 or at all,\u201d the office said in its commentary.<\/p>\n Min said forecasting data-center load is a national challenge, but California will need better tools to keep rates in check, meet its clean-energy targets and stay competitive with states racing to attract data centers and high-paying tech jobs.<\/p>\n Local officials have also begun to grapple with the uncertainty. In San Jos\u00e9, city energy officials say they are reluctant to procure additional power until they know which projects will actually be built. \u201cWe do not want to buy more power than we need,\u201d said panelist Lori Mitchell, director of San Jos\u00e9 Clean Energy, the city\u2019s publicly-owned electricity provider. \u201cThat\u2019s job No. 1.\u201d<\/p>\n What are the environmental concerns around the data-center boom?<\/p>\n California\u2019s data-center boom is bringing a wave of environmental concerns that state officials are only beginning to understand. Those concerns center on water use, the carbon emissions tied to rising energy demand and the air pollution from diesel backup generators.<\/p>\n Air quality is a particular concern. While back-up generators run only intermittently, their presence is concentrated in a handful of regions. In Santa Clara County, where many facilities sit close together in dense industrial areas, the local impacts could be greater simply because so much equipment is packed into a small space.<\/p>\n Yet the state still has limited visibility into what data centers are doing. Attempts to require more transparency stalled this year<\/a> amid tech industry opposition. The only measure that became law gives regulators the authority to determine whether data centers are driving up costs<\/a> \u2014 but stops short of requiring environmental reporting.<\/p>\n Ahmad Thomas, chief executive of the Silicon Valley Leadership Group, and another panelist, said his group opposed the electricity disclosure and water reporting measures because they would make California less competitive.<\/p>\n \u201cIt\u2019s very hard to see a world where California is at the top of the AI pile if we do not have an approach to data centers that is \u2014 at minimum \u2014 mildly competitive with other states,\u201d he added.<\/p>\n Consumer advocates say the lack of information leaves communities unprotected. \u201cWe certainly think there needs to be more transparency \u2014 that\u2019s a good thing,\u201d said panelist Mark Toney, the executive director of the the Utility Reform Network, a ratepayer advocacy group.<\/p>\n Will data centers slow down California\u2019s switch to clean energy?\u2028<\/p>\n The rapid growth of data centers could slow California\u2019s clean-energy transition if it keeps the state tied to natural gas. And some of the carbon-free alternative energy sources that could meet their power needs are deeply controversial among environmentalists.<\/p>\n The state has pledged to reach 100% carbon-free electricity by 2045, yet it still depends heavily on natural-gas plants during hot summer days. A recent report<\/a> by the environmental think tank Next 10 and UC Riverside estimated that data-center carbon emissions nearly doubled from 2019 to 2023 \u2014 largely from gas-fired generation \u2014 underscoring how even a relatively clean grid may struggle to absorb AI-driven load without higher emissions.<\/p>\n State leaders are making policy shifts as AI demand grows. California this year approved joining a broader Western power market<\/a>, a move driven in part by new demands on the grid, including data centers. Critics warn the change could expose the state to dirtier electricity from other states and weaken its control over clean-energy rules.<\/p>\n Min of Stanford argues that California will need to rely on options some environmentalists would rather avoid. That includes holding onto existing resources like the Diablo Canyon nuclear plant. In a recent report<\/a>, Min argued the state will also need more \u201cclean, firm\u201d power \u2014 resources that can operate around the clock \u2014 such as geothermal energy or natural-gas plants with carbon capture.<\/p>\n PG&E agrees. Spokesperson Stephanie Magallon told CalMatters in an email that nuclear power, carbon-capture systems and large solar-plus-battery projects are all options under consideration for powering data centers in its region. But environmental justice critics in California have opposed carbon capture technology<\/a>, calling it unproven tech that risks extending fossil-fuel use.<\/p>\n Mitchell said community choice aggregators can manage new data-center load while keeping power clean and affordable. San Jos\u00e9\u2019s mix is already 60% renewable, and she said the biggest opportunity is flexibility \u2014 getting data centers to shift use off the hottest afternoons so the city can avoid buying additional power.<\/p>\n Will data centers raise your electric bill?\u2028<\/p>\n California\u2019s data-center boom is reshaping the fight over electricity bills, exposing a divide over whether these new customers will lower costs \u2014 or drive them higher for everyone else.<\/p>\n PG&E argues that adding large users like data centers can lower rates because fixed grid costs would be spread across more customers. It also claims the grid is underutilized on average \u2014 operating at about 45% of capacity \u2014 although the grid faces real strain during the hottest hours and in parts of the system that routinely run close to their limits. If data centers can be connected in places with available capacity, PG&E argues, they could help spread costs without worsening congestion.<\/p>\n Toney, another panelist, urged the state to slow down, warning that California is planning major infrastructure without knowing which data centers are real or how their costs will land on customer bills.<\/p>\n \u201cI\u2019m worried that we\u2019re engaged in what I call faith-based policymaking,\u201d he said. \u201cThe benefits are very speculative, but the costs are very real.\u201d<\/p>\n Some states, said Toney, have begun tightening rules around the growth of data centers. One law in Oregon<\/a> will require data-center grid costs to remain off household bills. A Minnesota law<\/a> will give very large data centers their own billing category so regulators can keep their costs separate from other customers\u2019 electric bills.<\/p>\n \u201cThis issue of data centers and the connection between affordability and clean energy is of national concern, and California is actually behind on this,\u201d Toney said. \u201cThere\u2019s this mythology about California being the leader all the time.\u201d<\/p>\n Alejandro Lazo writes for CalMatters.<\/p>\n","protected":false},"excerpt":{"rendered":"The county seat of Santa Clara is touting its partnership with Pacific Gas & Electric, claiming the city…\n","protected":false},"author":2,"featured_media":93706,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[2007,7,51523,1409,1750,4442,38177,51521,51524,3604,4840,36899,88,90,89,225,51522,72],"class_list":["post-93705","post","type-post","status-publish","format-standard","has-post-thumbnail","category-san-jose","tag-ai","tag-california","tag-calmatters-event","tag-city","tag-cost","tag-data-center","tag-datum-center","tag-liang-min","tag-panelist","tag-pge","tag-power","tag-regulator","tag-san-jose","tag-san-jose-headlines","tag-san-jose-news","tag-state","tag-triple-san-jose","tag-year"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/93705","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=93705"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/93705\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/93706"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=93705"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=93705"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=93705"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}