SAN JOSE — PG&E is focusing expansion and upgrade plans in the San Jose area as officials predict the South Bay’s need for electricity will far outstrip a projected jump in demand within its service territory, the investor-owned utility’s chief executive said in a wide-ranging interview. For PG&E, San Jose offers a confluence of land and demand. The city has plenty of available open space for a tech industry whose thirst for energy has soared. PG&E Chief Executive Officer Patricia Poppe participates in an event at an electricity station in the Alviso district of North San Jose, July 25, 2025. (George Avalos/Bay Area News Group) “San Jose is very important because it has room to grow,” PG&E Chief Executive Officer Patricia Poppe told this news organization. “There is demand from tech companies to grow here.” Oakland-based PG&E is already planning upgrades at two key substations in downtown San Jose — at Substation A at the corner of South Montgomery Street and Otterson Street, and at Substation B at 260 Coleman Ave. A 9.8-acre vacant land site near the corner of Coleman Avenue and Santa Teresa Street in downtown San Jose. PG&E San Jose Substation B is located in the background. (George Avalos/Bay Area News Group) Poppe said the tech industry had the perception that PG&E didn’t have sufficient capacity to provide the power needed for an array of cutting-edge endeavors. “One of the big misunderstandings was that tech companies thought PG&E was out of power, but they were wrong about that,” Poppe said. “We hadn’t communicated well about that.” Fresh demand for new and upgraded power hubs has since followed. “Once tech companies found out we had power, they wanted to grow here,” Poppe said. “That is what has driven our first rush for demand.” The tech industry’s hunger for power in the South Bay is expected to persist, said Jake Zigelman, a PG&E vice president who heads up the utility’s operations in the Bay Area. Related Articles PG&E CEO sees no credit upgrades until California fire season ends California joins coalition of states suing Trump administration for canceled solar program funding Regulators know PG&E, Edison are slow to hook up solar. Why are there no penalties? Trump’s $7.6 billion energy cuts hit California grid upgrade Historic battery plant cleanup kicks off in Moss Landing “We see increased demand for electricity and our services in San Jose over a long period,” Zigelman said in an interview with this news organization prior to participating in an event Tuesday hosted by the San Jose Chamber of Commerce. Largely driven by data centers, electric vehicles and building electrification, PG&E load growth is expected to roughly double by 2040, Zigelman said. PG&E sees San Jose driving that push for power. “About 20% of that projected data center load growth, or nearly 2 gigawatts, is concentrated in San Jose, nearly tripling the city’s current energy use,” Zigelman said. PG&E has received inquiries for potential increases in power capacity from locations such as other parts of the South Bay, San Francisco, Sacramento and the Central Valley. San Jose’s current energy load is 1 gigawatt. The predicted demand is poised to require the creation of another 1.8 gigawatts of capacity, which would bring the total to around 2.8 gigawatts. “Tech companies need land, they need space to build infrastructure, and they need power,” Poppe said. “So where there’s land, we deliver the power.” The utility’s customers might also benefit from the push to upgrade electricity hubs and provide more power to corporate customers, according to PG&E. “PG&E estimates that every gigawatt of new demand from data centers can help lower PG&E bills by 1% to 2% under the right circumstances,” said Stephanie Magallon, a PG&E spokesperson. Large energy users can take on a larger share of the fixed costs of operating and maintaining the electric grid, she said. “When we share the grid with more customers, we can lower the cost for everyone, especially when we have excess capacity on the grid, which we do, because we have invested in the infrastructure,” Poppe said. PG&E’s electricity and data center plans have been met with skepticism by The Utility Reform Network, a consumer group also known as TURN. “TURN is very concerned about data centers driving up electric rates for Californians,” said Mark Toney, TURN’s executive director. “It’s essential that those costs are recovered fairly and don’t cause electric rates to increase for households who are already struggling to pay their utility bills.” In September, PG&E monthly bills fell by an average of $5 for the typical residential ratepayer who uses 500 kilowatt hours a month and isn’t on a subsidized billing plan. That equates to a 2.1% decrease. The decline offset a pattern in recent years of fast-rising PG&E bills. At present, PG&E is working to deliver electricity to a pipeline of projects that together will require about 10 gigawatts, according to Magallon. Among those projects, 17 data centers totaling roughly 1.5 gigawatts are in the final engineering phase, which is the last step before actual construction begins. The data centers are slated to begin operating between 2026 and 2030, Magallon said. Upgrades at substations A and B could bolster downtown San Jose projects such as the Westbank housing developments that are proposed in the city’s urban core and Google’s transit-oriented neighborhood that might be built on the western edges of downtown near the Diridon train station and SAP Center. PG&E is also intrigued by proposals from Westbank to build data centers near housing towers and then capture the excess energy produced by the tech hubs to provide electricity to adjacent housing towers. “We are particularly excited about Westbank because it has that neat heat capture element that can actually reduce the electric load to heat a building,” Poppe said. “That is a really wonderful use of new technologies.” PG&E said it’s also ready to provide power to the Google transit village, which is known as Downtown West. Google has paused development of the mixed-use village of homes, offices, shops, restaurants, cultural loops, entertainment hubs and open spaces. “We’ll let Google talk about their project,” Poppe said. “But what I’ll tell you is we’re ready to power major infrastructure projects like Google’s, which is why we are investing in those substations.”
