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PG&E ( PCG ) says data center interest up in new parts of

California

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Potential new demand seen in April study

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Data center developers want much bigger sites than

indicated

last year

By Laila Kearney

May 27 (Reuters) - PG&E ( PCG ), California's largest

electric utility, has seen a jump of more than 40% this year in

requests for power supplies from data center developers across

the northern part of the state, an executive with the company

told Reuters on Tuesday.

California's Silicon Valley is one of the world's largest

and oldest data center markets, but analysts have widely said

that pricey land and costly electricity will limit the state's

ability to capitalize on the current wave of demand for

artificial intelligence data centers, which is concentrated in

the middle of the country.

PG&E ( PCG ), however, said it is seeing signs that the state still

has room to run.

Last month, PG&E ( PCG ), which delivers power and natural gas to

about 16 million people in northern and central California,

including Silicon Valley, launched a process for data center

developers interested in connecting to the utility's system.

The so-called cluster study yielded 4.1 gigawatts of

interest, on top of the 8.7 gigawatts announced during the

company's most recent earnings call in late April, said Mike

Medeiros, PG&E's ( PCG ) vice president of South Bay Delivery.

Not only did the pipeline of prospective data centers being

built within PG&E ( PCG ) grow, but the size of the projects has also

jumped since the previous year's cluster study, Medeiros said.

Last year, the typical data center wanting to power up

through PG&E ( PCG ) had 50 to 100 megawatts in capacity. Current

proposals are for projects of 500 megawatts to as much as 1,000

megawatts.

"We're seeing quite a change in what customers are looking

for, and some of that might be based on land availability or

just scale and the efficiencies of building bigger," Medeiros

said.

Unlike earlier data centers, those for AI are used primarily

for training the large language models, like ChatGPT, and can be

further away from city centers.

While California's older data centers are in Silicon Valley

in the western part of the state, many of the new proposed

developments are inland, including in Contra Costa County and

the Fresno area.

Not all of the data centers making inquiries are expected to

ultimately connect to PG&E ( PCG ). Some of the top challenges in data

center expansion for the utility include meeting the tight

timelines by developers and operators and backlogs in the

equipment needed to build out the grid.