This July, San José took a bold step forward as a global hub for technology infrastructure through an unprecedented agreement with Pacific Gas and Electric Company (PG&E) to fast-track electric service delivery for large-scale energy users—most notably, data centers.

The first agreement of its kind between PG&E and a municipality, it will increase the speed of connecting large energy users to the grid, improve access to power, and hold PG&E accountable to performance obligations. This agreement positions San José as one of the nation’s best cities for powering next-generation infrastructure in its key industrial and innovation zones.

Data Centers and San José

Data centers are a backbone of the tech economy, powering cloud computing, AI, logistics, and communications.

San José is primed to benefit from growing demand for data centers:

• San José sits within 25 miles of more than 40 Fortune 500 tech headquarters, whose proximity to data centers are needed for real-time data processing.
• Available industrial and commercial land in north and south San José, at lower costs than comparable Bay Area markets, are well-suited for data centers.
• Two new high-voltage transmission lines are planned for the region by 2028 – which could triple San José’s electrical capacity.

In San José, data centers will have the option to use San Jose Clean Energy, which provides 100% renewable options and the South Bay Water Recycling program, which offers recycled water below potable rates. These two advantages will enhance a company’s ability to meet California’s environmental quality regulations.

Along with San José’s already thriving ecosystem of talent, diversity, and infrastructure, this agreement with PG&E represents an innovation-enabling and transformative moment for San José. With the current trajectory of expansion, San José is set to see more electrical infrastructure built in the next five years than in the past fifty, while neighboring cities are not experiencing a comparable level of investment.

Public Benefits Beyond Tech

The benefits of this agreement will reach far beyond the data centers:

Fully operational data centers can generate $3.4–$6.8 million annually in City utility and property taxes—funding vital city services such as public safety, libraries, parks, and infrastructure.

PG&E estimates that every 1,000 megawatts of new data center demand could lower all PG&E customer bills by 1–2%. Large customers absorb more fixed grid costs, reducing rates for everyone.

By expanding capacity, San José is supporting growth for all commercial and industrial users, creating jobs, attracting investment in underserved areas, and boosting long-term revenue for public services.

Looking Ahead + Let Us Help Your Business Thrive!

This agreement between the City of San José and PG&E is part of a larger strategy to integrate land use policy, workforce development, and clean energy to strengthen San José’s position as a leader of the global tech economy. The City remains committed to building resilient infrastructure for generations to come.

For more information about the City’s large-load energy development, contact Erica Garaffo, Large-Load Energy Customer Development Lead at erica.garaffo@sanjoseca.gov.

To connect with the City’s economic development team for corporate growth and expansion opportunities, connect with Corporate Outreach Officers Noelle Rabago (noelle.rabago@sanjoseca.gov) or Doug Moody (doug.moody@sanjoseca.gov).