DATA CENTERS AND PG&E PARTNERSHIP UPDATE
CITY COUNCIL| APRIL 21, 2026
PRESENTED BY:
Manuel Pineda, Deputy City Manager
Chris Burton, Director, Planning Building and Code Enforcement Jeff Provenzano, Director, Environmental Services
Erica Garaffo, Assistant to the City Manager
Madeline Silva, Pacific Gas & Electric Company
1 TODAY’S FOCUS:
Today’s action does not approve specific data center
developments, backup generation, or site
entitlements.
CAISO and PG&E projects move through their own
CEQA and public review processes.
Each individual development project must still go
through San José’s development review and public
notice process.
Any future data center proposal will be reviewed
project by project, with opportunities for public
comment.
WHY THIS MATTERS:
Reliable electricity is now a key
constraint on San José’s
economic growth
Large-load energy customers
are critical to General Fund
stability
City actions focus on balancing
environmental impact, economic
development, and infrastructure
readiness
2 COUNCIL DIRECTION & PG&E AGREEMENT
March 2025:
Council direction
to pause
municipal utility
exploration and
negotiate a
partnership with
PG&E
July 2025:
Implementation
Agreement executed
with PG&E
Dedicated staffing
and enforceable
timelines for 12
large-load
projects (>20 MW)
and 250MW for
RWF Plant Lands
Development
3 CITYWIDE
COORDINATION
MODEL
TECHNOLOGY:
+ Shared tracking
inventory of projects
from pre-application
through
energization
PROCESS:
+ Biweekly PG&E
coordination and
quarterly performance
scoring
+ Monthly internal
meeting
PEOPLE:
+ Cross-departmental Data
Center Development Team
+ Large Load Energy
Customer Development
Lead (OED)
+ Data Center
Development Facilitation
Officer (PBCE)
4 ELECTRICAL INFRASTRUCTURE DELIVERY
Biweekly coordination with PG&E,
Monthly updates on project
milestones, Quarterly Scoring
12 projects participating in the
Implementation Agreement
2 energized; remaining 10 will be
energized by 2030
~6 more projects may be added to the
Agreement by the end of 2026.
Project ID Quarter Expected PG&E Scored as of
Q4 2025
A-2 Q4 2028 Q4 2028
A-3 Q2 2026 Q3 2026
A-4 Q4 2026 Q4 2026
A-5 Q2 2029 Q2 2029
A-6 Q2 2028 Q2 2028
A-7 Q4 2027 Q4 2027
A-8 Q4 2025 Energized
A-9 Q4 2025 Energized
A-10 Q4 2028 Q4 2028
A-11 Q1 2030 Q1 2030
A-12 Q4 2026 Q4 2026
A-13 Q1 2030 Q1 2030
GREEN YELLOW
Project is within 45 days of target schedule. No outstanding agency reviews, permits, or approvals beyond normal processing times. No escalated issues requiring focused senior
management attention to resolve (i.e., beyond regularly scheduled meetings)
Project is within 45-120 (1 Quarter) days behind schedule. Minor permitting or supply chain delays that are actively being addressed. Mitigation plan in place that does not delay the in- service or permanent power energization date or require leadership intervention. 5
FISCAL BENEFITS OF DATA CENTERS
$3M–$7M Annual General
Fund Revenue Per 50–99
MW Data Center once fully
built out
Minimal Traffic And Service
Demands
Retains Economic Activity
Locally
6 ENVIRONMENTAL REVIEW FOR DATA CENTERS IN SAN JOSE
CEQA Environmental Review
Scope & Air Quality Emphasis
CEQA evaluates a project’s full
environmental footprint
(including GHG emissions,
utilities, hazards, and
infrastructure) with particular
scrutiny on cumulative air
quality impacts and compliance
with regional air standards.
The Bay Area Air District (BAAD) requires permits
for diesel backup generators greater than 49
brake horsepower (bhp), with strict rules limiting
maintenance and testing to typically 50 hours per
year. As of late 2024, new or modified diesel
generators greater than 49 bhp must meet strict
EPA Tier 4 emission standards, the highest level
of control.
7 WATER SUPPLY FOR DATA CENTERS
Recycled Water Prioritization & Water-
Demand Threshold Compliance
Projects must undergo an
environmental review
Larger projects above the threshold
may require a Water Supply
Assessment
Prioritize recycled water use
Fund necessary water system
improvements
Development Type Thresholds for "Water-Demand
Project" specific to Data Centers
Industrial,
Manufacturing, or
Processing Plant, or
Industrial Park
A project occupying more than 40 acres
of land
A project having more than 650,000
square feet of floor area
Commercial Office
Building
A project encompassing more than
250,000 square feet of floor space
Equivalent Water
Demand
Any project that would demand an
amount of water equivalent to, or greater
than, the amount of water required by a
500 dwelling unit project.
8 Proposed Electric Rule 30
Type 1 Type 2 Type 3 Type 4
Paid by Large Load Customer Upfront Paid by PG&E Customers Applicant-owned
Substation
PG&E Owned
Substation
Existing CAISO
Controlled Grid
Transmission
Network Upgrades
Transmission
Interconnection
Network Upgrades
Transmission
Interconnection
Upgrades
Transmission
Service Facilities
Meter
Transmission
Service Extension
Transmission Line
Extension
NOTE: PG&E has proposed this framework to the CPUC. Although proceedings have started, final decision is estimated in late 2026.
FOUR NEW TRANSMISSION LINES PLANNED BETWEEN
2028-2034, BUILDING 2000MW+ CAPACITY
10 2028: Substation B to Metcalf
(1000 MW capacity)
2028: Newark to NRS
(1000 MW capacity)
KEY:
Awarded and will be under construction in 2026
Proposed and will be awarded in 2026
Two CAISO Grid Capacity
projects will start
construction in 2026 and
bring the planned capacity
for the region by 2028
(2000 MW total capacity).
Another two additional high-
voltage lines are expected
to be in service between
2030 and 2034.
The Metcalf to Manning
project is expected to
unlock access to renewable
energy projects in the
Central Valley.
~2030: NRS to Substation B
~2034: Metcalf to
Manning
KEY
TAKEAWAYS
Council direction is producing results
PG&E Agreement improves accountability
Strong fiscal upside with environmental
safeguards
Continued coordination remains critical
11 DATA CENTERS AND PG&E PARTNERSHIP UPDATE
CITY COUNCIL| APRIL 21, 2026
PRESENTED BY:
Manuel Pineda, Deputy City Manager
Chris Burton, Director, Planning Building and Code Enforcement Jeff Provenzano, Director, Environmental Services
Erica Garaffo, Assistant to the City Manager
Madeline Silva, Pacific Gas & Electric Company
12