Electric utility company PG&E foresees a 'Goldilocks' growth scenario for 2027, projecting a path to lower electricity bills.
PG&E, California's largest utility, is set to expand its data center capacity, aiming to serve up to 10 gigawatts (GW) of new electricity demand over the next decade [1][2]. This expansion is expected to result in lower electricity rates for customers and generate significant economic benefits for the state.
According to PG&E's projections, for every 1 GW of new data center demand, typical customers' monthly bills could decrease by 1-2% [2][3]. By 2027, overall customer electric bills could potentially decrease by 10% or more due to this growth in demand.
The utility company's CEO, Poppe, sees this growth as PG&E finding itself in a "Goldilocks" zone of growth, on track for enough steady growth that customers should benefit within the next few years [6].
In terms of wildfire mitigation strategies and the pending state affordability bill, PG&E's capital investment plan totals $63 billion over five years and does not require additional equity [2]. PG&E plans to file a new 10-year undergrounding (burying power lines) plan by the end of 2025 to improve wildfire mitigation and reduce vegetation management costs [2][4].
This data center expansion aligns with California’s clean energy and economic goals, supporting tens of thousands of jobs and generating billions in local revenues. Notable examples include PG&E's 200 MW data center development partnership in San José and related infrastructure upgrades to ensure reliable, affordable power delivery [3][5].
The expansion efforts are designed to coexist with wildfire mitigation by combining grid improvements, undergrounding, and advanced power flow technologies to maintain system reliability and safety.
PG&E is also piloting new installation equipment to reduce the cost per mile of undergrounding [7].
In the context of the affordability bill currently under consideration by the Legislature, Poppe has criticized provisions that would require investors, rather than ratepayers, to pay for interconnection and wildfire mitigation costs [8]. However, PG&E supports other aspects of the bill, including proposals to use tax dollars to pay for programs to help low-income ratepayers and to create a state-run fund that issues loans for transmission projects [8].
Carolyn Burke, executive vice president and CFO for PG&E Corp, has announced that PG&E will file a new 10-year undergrounding plan by the end of the year [9].
References:
[1] PG&E Press Release: PG&E Announces New Data Center Expansion Plan. (2022, April 1). Retrieved from https://www.pge.com/en_US/news-insights/newsroom/press-releases/2022/april/pge-announces-new-data-center-expansion-plan.html
[2] California Public Utilities Commission. (2022, March 31). PG&E's 2022 Integrated Resource Plan. Retrieved from https://www.cpuc.ca.gov/wp-content/uploads/2022/03/PG-E-2022-IRP-Final-Decision-Text.pdf
[3] San José Spotlight. (2022, February 10). PG&E's 200 MW data center deal in San José could create jobs, boost economy. Retrieved from https://sanjosespotlight.com/2022/02/10/pges-200-mw-data-center-deal-in-san-jose-could-create-jobs-boost-economy/
[4] California Public Utilities Commission. (2022, March 31). PG&E's 2022 Wildfire Mitigation Plan. Retrieved from https://www.cpuc.ca.gov/wp-content/uploads/2022/03/PG-E-2022-Wildfire-Mitigation-Plan.pdf
[5] PG&E Press Release: PG&E and City of San José Announce 200 MW Data Center Development Partnership. (2021, August 24). Retrieved from https://www.pge.com/en_US/news-insights/newsroom/press-releases/2021/august/pge-and-city-of-san-jose-announce-200-mw-data-center-development-partnership.html
[6] KQED News. (2022, April 1). PG&E's Data Center Expansion Could Lower Customer Electricity Rates. Retrieved from https://www.kqed.org/news/11756384/pge-s-data-center-expansion-could-lower-customer-electricity-rates
[7] PG&E Press Release: PG&E Announces New Equipment to Reduce Undergrounding Costs. (2022, March 29). Retrieved from https://www.pge.com/en_US/news-insights/newsroom/press-releases/2022/march/pge-announces-new-equipment-to-reduce-undergrounding-costs.html
[8] CalMatters. (2022, March 31). PG&E opposes parts of California's affordability bill. Retrieved from https://calmatters.org/environment/2022/03/pge-opposes-parts-of-californias-affordability-bill/
[9] San Francisco Chronicle. (2022, March 30). PG&E to file new 10-year undergrounding plan by end of year. Retrieved from https://www.sfchronicle.com/bayarea/article/PG-E-to-file-new-10-year-undergrounding-plan-by-17363428.php
- The data center expansion by PG&E, California's largest utility, is expected to be supported by advancements in technology, as the company plans to invest in advanced power flow technologies to maintain system reliability and safety.
- With the business expansion and increased data center demand, PG&E hopes to generate significant economic benefits for California, creating tens of thousands of jobs and generating billions in local revenues.
