Google Faces $150 Million PG&E Bill for San Jose AI Power

Google has told California regulators it will pay Pacific Gas & Electric up to $150 million upfront, worked out at $600,000 per megawatt, to connect a 250 megawatt data center load in San Jose to the regional transmission grid. The figure comes from a draft California Public Utilities Commission resolution on PG&E’s Advice Letter 7785-E, and the commission has pulled the item from its voting agenda three times since August, most recently holding it to an October 8 meeting, according to Stoel Rives’ energy regulatory tracker and Spectrum News.

Why it matters

The draft resolution, numbered E-5455, is the first CPUC decision to require an upfront advance specifically from a data center customer, rather than folding the cost into general rates. PG&E has told the commission the underlying grid upgrades were already planned and would move forward with or without Google’s load, benefiting thousands of other homes and businesses in the area. The Public Advocates Office has pushed the other direction, asking the commission to cap Google’s refund eligibility at 75 percent of net revenues and stretch the repayment period to 15 years, up from the standard 10. For every other data-center developer negotiating a connection in PG&E territory, this is the first real price signal on what an upfront advance payment looks like.

The numbers

PG&E’s own estimate for the related grid upgrades runs $64 million to $137 million, not counting the Income Tax Component of Contribution, according to JD Supra’s summary of the filing. The $150 million figure tracks the $600,000 per megawatt rate applied to Google’s full 250 MW request. The same advance structure is already testing out on two smaller San Jose loads, a 90 MW STACK data center and a 90 MW Microsoft facility, under separate advice letters.

What’s next

Resolution E-5455 is not final. It has moved from an August 13 voting meeting to September 3, then to October 8, and its outcome was not confirmed as of this writing. The same question is playing out at a larger scale in PG&E’s pending Electric Rule 30 proceeding, A.24-11-007, which will set the statewide framework for how future large loads, data centers included, get billed for interconnection in San Francisco Bay Area utility territory and beyond.