Data centers for AI could nearly triple San Joss energy use. Who foots the bill?

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The county seat of Santa Clara is touting its partnership with Pacific Gas & Electric, claiming the city is “the West Coast’s premier destination for data center development.” The investor-owned utility now estimates it has enough capacity in its planning pipeline to push the city’s electricity use to almost three times its current peak.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.Panelists at a CalMatters event in downtown San José clashed over key issues.They included a local official working with PG&E on the city’s 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’s promised benefits.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.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.The surge in AI is complicating efforts by regulators and utilities to forecast how quickly data centers will grow and how much power they’ll 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.According to the state’s electricity-demand forecast, utilities report that data centers, in plannin...