Google Plans $150 Million San Jose Power Connection
The company will provide an upfront payment to link its upcoming San Jose facility to the local electrical grid.
Updated on Oct. 29, 2026 in Data Centers
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Google has agreed to pay an upfront cost of $150 million to secure a 250-megawatt electricity connection for a project located at 5079 Disk Drive in the Alviso district of San Jose. This arrangement aims to shield PG&E ratepayers from the expenses associated with necessary transmission network upgrades.
Why it matters
The deal ensures that the financial burden of building equipment for the high-capacity power connection rests with the tech company rather than the public utility's general ratepayer base. This mechanism is a key regulatory requirement for large-scale infrastructure projects requiring significant grid expansion.
The project requires a 250-megawatt power connection at a rate of $600,000 per megawatt. Plans include the development of three research and development buildings totaling up to 482,800 square feet.
The players
A global technology company that develops internet-related services and infrastructure, including research and development facilities.
PG&E
Pacific Gas and Electric Company is a major utility provider responsible for the delivery of natural gas and electricity to customers in Northern California.
Public Utilities Commission
The California state regulatory agency that oversees public utilities and ensures that infrastructure projects meet state safety and financial standards.
The details
Google is currently preparing the site for construction, which involves building dedicated facilities to link into the grid. The state Public Utilities Commission is currently reviewing the proposal to verify that the cost-sharing structure adequately protects the public utility's ratepayers.
Timeline
2026 is the year the Public Utilities Commission is scheduled to rule on the proposal.
Construction is expected to begin about six months following the regulatory approval.
Construction is expected to take approximately two years to complete once it starts.
The Tech Race
This agreement reflects a broader shift toward securing massive power capacity for resource-intensive research facilities. It marks a departure from traditional utility funding models by shifting the initial capital expenditure of grid upgrades directly to the tech developers.
The agreement is designed to prevent local utility customers from seeing rate hikes caused by the specific transmission upgrades required for the Google facility. Residents in San Jose can expect the utility to manage the construction process through these established ratepayer protections.
The takeaway
Large-scale infrastructure developments now require complex financial agreements to manage their immense electricity needs. These deals act as a safeguard for public utilities by isolating the costs of network expansion from the general consumer base.
What happens next
The Public Utilities Commission is scheduled to make a final ruling on the project proposal in 2026.
Further reading
For more information on local facility growth, see the Data Centers section.
Source note: This article includes information reported by San Jose Mercury News.
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