Utilities and power producers across North America are experiencing demand for power like never before. Much of it comes from the data center sector as it tries to fulfill requirements for artificial intelligence (AI) applications.
The data center industry is growing exponentially. Here are a few key factors behind the boom:
- AI is the key driver of growth in demand for energy capacity. Global demand could rise yearly between 19 and 22 % from 2023 to 2030, according to consultant firm McKinsey.
- The U.S. with over 5,400 data centers already far outpaces other countries, and that number is set to rise rapidly.
- The International Energy Agency IEA) predicts that electricity demand from AI-optimized data centers will more than quadruple worldwide. Further, IEA says that the US will consume more electricity in 2030 for processing data than for making all energy-intensive goods combined. Utilities are scrambling to keep up.
Case in point: Pacific Gas and Electric Company, a subsidiary of PG&E Corporation, is a combined natural gas and electric utility serving over sixteen million people across 70,000 square miles in Northern and Central California. It announced surging data center growth in its territory.
The company’s most recent earnings report listed 8.7 GW in PG&E’s data center project pipeline of electricity over the next 10 years. That’s a big increase from the 5.5 GW PG&E reported at the end of 2024. This includes 18 data center projects – totaling approx. 1.4 GW – in the final engineering phase, the last step before project construction starts.
These data centers are projected to begin operations between 2026 and 2030. Most are in Silicon Valley, San Francisco, and the Bay Area, but some are also in the Central Valley and Sacramento.
Also, there is 4.1 GW of more power demand from 21 new data center project applications as part of its follow-up cluster study launched in April 2025. PG&E is working with these customers through the end of the year to scope and finalize their requests.
Due to its territory serving Silicon Valley and the Seattle high-tech corridor, PG&E has plenty of experience in serving U.S. data center markets. “What differentiates the opportunity for data centers in California is a diversified set of customers and projects, excess clean power supply, and a regulatory approach which ensures that our existing residential customers will save money,” said Mike Medeiros, Vice President, South Bay Delivery, PG&E.
He believes this spike in data center power will help lower energy costs for PG&E customers. Every 1 GW of new electric demand from data centers could decrease monthly electric bills by 1-2%, according to the company.
How? New energy demand from data centers lets PG&E utilize more of its existing power infrastructure. By spreading the costs over more units of energy, each customer’s dollar can go further.
