San Jose, California, is targeting the title of the West Coast’s foremost data center hub. This ambition is supported by a novel agreement with utility provider PG&E. They are set to add 2,000 megawatts of transmission capacity, aiming to attract data centers by ensuring reliable power connections.
This collaboration is the first of its kind in the state, marking San Jose as a leading power-ready city. PG&E is simultaneously working on 18 other data center projects throughout California, emphasizing the utility’s commitment.
Data centers have soaring power demands, especially with the rise of AI technologies. Therefore, having dependable access to the electric grid is crucial. These demands have prompted San Jose to work with PG&E on extending the grid capacity. PG&E has already received requests for nearly 2,000 megawatts of energy demand from new data center projects in the area.
Jennifer Maguire, San Jose’s City Manager, views the agreement as transformative, emphasizing the enhancement of local infrastructure. “This agreement ensures our residents benefit through job creation, workforce development, and significant revenue that will support essential city services,” she said.
San Jose is strategically positioned near prominent tech companies, with about 40 Fortune 500 HQs located within 25 miles. This proximity makes it a prime location for cloud providers and tech professionals.
Additionally, San Jose emphasizes environmental responsibility. The agreement guarantees options for up to 100% renewable energy and offers cost-effective recycled water—further supporting sustainability objectives.
Mayor Matt Mahan stated, “San José isn’t just the heart of Silicon Valley — we’re the launchpad for what’s next.” He believes this agreement enables the city to continue leading the AI revolution by ensuring businesses get power when needed.
While some regions might resist data center accommodation due to environmental strains, San Jose is embracing them. The benefits are multifaceted, including the city’s revenue gain. Once operational, the data centers will significantly add to the city’s utility and property tax income annually.
