Fri Aug 01 15:40:00 UTC 2025: ## San Jose and PG&E Forge New Agreement to Boost Energy Reliability and Attract Investment
**San Jose, CA** – After years of strained relations, the City of San Jose and Pacific Gas & Electric (PG&E) have announced a landmark agreement aimed at bolstering energy reliability and attracting significant investment to the region. The deal, unveiled Friday, establishes a framework for infrastructure upgrades and performance guarantees, potentially paving the way for San Jose to become a premier data center hub and boosting the city’s tax base.
The agreement focuses on ten priority projects across Edenvale, North San Jose, and downtown, representing a combined 880 MW of new load – roughly 80% of the city’s current energy consumption. These projects, including Westbank’s net-zero data center and housing development, are intended to be the first phase of a larger initiative to support 2,000 MW of new power demand.
“What this implementation framework – the first of its kind in PG&E territory – does is it creates a binding performance obligation related to speed and certainty of power for large load customers,” said Mayor Matt Mahan. He emphasized the importance of energy reliability for attracting research and development facilities, manufacturing, and data centers.
The need for a reliable energy supply has become a major concern for San Jose, particularly in growth areas like downtown and North San Jose. Land-use consultant Bob Staedler hailed the agreement as a “huge milestone,” noting that it could expedite San Jose’s economic prosperity by addressing the long lead times often associated with connecting to the grid.
PG&E CEO Patti Poppe emphasized the utility’s commitment to the partnership, stating the company plans to invest $2.6 billion in existing facilities and infrastructure expansion. “This historic agreement means San Jose is open for business,” Poppe said at a press conference. “It means our tech companies can thrive here, grow here and continue to invest here, which is good for everybody.”
In addition to PG&E’s commitments, LS Power is constructing two major high-voltage transmission lines to further improve electrical reliability. These lines will increase San Jose’s power capacity significantly, potentially reaching 3 GW.
The agreement also includes a provision for PG&E to fund six roles within the city’s public works and economic development departments, fostering collaboration and efficiency. Furthermore, PG&E will provide 250 MW of electrical capacity for the first phase of developing the Regional Wastewater Facility’s economic lands.
The benefits extend beyond attracting businesses. City officials anticipate that the increased energy consumption will lower residents’ bills by 1-2% due to underutilized capacity on the California electrical grid. Moreover, a single 99 MW data center could generate millions in annual revenue for critical city services like public safety and road maintenance.
However, the agreement includes a contingency plan. If PG&E fails to meet its obligations within six months, San Jose can terminate the agreement and reconsider the possibility of establishing a municipal utility. “We are focusing first on what we think is the lowest risk approach to delivering these projects, which is partnering more closely with PG&E, but if the utility can’t deliver, we will go back to pursuing a municipal utility,” said Mahan.
This agreement represents a significant shift in the relationship between San Jose and PG&E, with the potential to drive economic growth and improve the quality of life for residents. Only time will tell if PG&E can meet its obligations and deliver on the promise of a more reliable energy future for San Jose.
First Piper 