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San Jose and PG&E Seal Deal to Boost Grid Capacity for Data Centers

The pact gives PG&E six months to meet performance targets for critical grid upgrades before San Jose can pursue a municipal utility

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PG&E San Jose Substation A, located near the corner of South Montgomery Street and Otterson Street in downtown San Jose, seen on June 17, 2025.
(George Avalos/Bay Area News Group)
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Overview

  • The agreement commits PG&E to deliver infrastructure upgrades on 10 priority projects in Edenvale, North San Jose and downtown, totaling 880 MW of new capacity for large energy users.
  • These improvements are engineered to support nearly 2,000 MW of demand, targeting long-standing reliability issues that have stalled major developments.
  • The pact enforces binding performance targets with a six-month cure window, after which San Jose may terminate the agreement and explore creating its own utility.
  • PG&E will fund six roles within San Jose’s public works and economic development departments to streamline planning and remove barriers to quicker power delivery.
  • LS Power has begun building two high-voltage transmission lines to bolster regional reliability, and PG&E has initiated substation upgrades downtown alongside a $2.6 billion South Bay investment plan through 2035.