Google's North San Jose Power Hookup: What the $150 Million PG&E Deal Means

by Chris Renois

A large Google project on Disk Drive in North San Jose has been working its way through state regulators. This week it reached a new milestone over a question many Bay Area households care about: who pays to connect very large electricity users to the grid. According to California Regulatory Intelligence, a newsletter that tracks the California Public Utilities Commission (CPUC), PG&E and Google have revised their agreement for the 250-megawatt facility. The new version includes a $150 million advance and other protections meant to keep costs from falling on other PG&E customers.

Where the project is and what's planned

A CPUC draft resolution says PG&E would provide high-voltage (230 kV) service to Google's facilities at 5079 Disk Drive in San Jose. San José Spotlight has reported plans for 5079 and 5087 Disk Drive in North San Jose. Those plans would replace an existing warehouse and parking lot with up to three research and development buildings totaling nearly 483,000 square feet. The San Jose Blog, citing the Silicon Valley Business Journal, places the project at Google's Meadow Point campus.

The power demand is large. In its draft resolution, the CPUC notes that 250 megawatts is more than the average demand of all of Marin County in 2024 and about half of San Mateo County's. To connect the site, PG&E describes building a switching station on the site and running underground 230 kV lines to a Google substation.

The facility's label has been disputed. A Google spokesperson told San José Spotlight that it will be an internal research lab for chip engineering, not a data center. The company said it is seeking a site development permit for research and development use rather than the special use permit a data center would need. Some local advocates and outside experts quoted by the outlet disagree with that description. San José Spotlight also reported in July that the project was still early in city review and that the city planned to rely on earlier environmental reports from 2000 and 2013 instead of a new full review.

Timeline and approval status

March 3, 2025: Google applied to PG&E for the connection, according to the CPUC draft.
December 18, 2025: PG&E asked the CPUC to approve the agreement (Advice Letter 7785-E).
Target dates: PG&E wanted approval by June 1, 2026, so construction could start in January 2027 and service could begin in December 2028.
2026: Spectrum News reported that the CPUC has repeatedly postponed its vote. California Regulatory Intelligence reported that the commission expected to hold the item again at its October 29 meeting, the same week the revised filing came in.

On October 29, the CPUC postponed the item again and moved it to its November 19 meeting, according to California Regulatory Intelligence.

Why the $150 million matters to PG&E customers

The core issue is cost sharing. When a large customer connects, it usually pays construction costs up front and then gets refunds over time from the electricity bills it pays. In its July draft, the CPUC said the standard refund formula could pay large high-voltage customers back before their bills had actually covered the costs and risks. The draft therefore proposed limiting Google's yearly refunds to the net revenue PG&E actually receives from the customer.

Google would connect to the Newark–NRS 230 kV transmission line, which is under construction. The state's Public Advocates Office described it as a project costing roughly $1 billion. PG&E's reply, as summarized by the CPUC, says that upgrade is going ahead whether or not Google's facility is built. PG&E also says thousands of homes and businesses in the region will benefit from it.

Spectrum News quoted Elise Torres of The Utility Reform Network (TURN), a ratepayer advocacy group. She said a draft resolution would require Google to pay $600,000 per megawatt up front, or up to $150 million. The goal is to protect other customers from being left with grid-upgrade costs. She also suggested that neither PG&E nor Google was happy with the provision. The revised agreement now includes a $150 million advance. The public sources we reviewed did not yet spell out the full terms, such as how or when the money might be refunded.

Torres also told Spectrum News that the decision will probably signal how the CPUC handles "Rule 30." That is a broader set of proposed standards for connecting large electricity users to the transmission grid. In other words, the decision may shape how future data centers and other high-energy projects around the Bay Area share grid costs with homeowners and small businesses.

What Bay Area homeowners, buyers and sellers may want to know

Electric bills: The outcome won't change anyone's bill overnight. But it touches the question of whether residential customers help pay for grid upgrades driven by very large users. If your budget is tight, PG&E rate cases and CPUC decisions are worth following.
North San Jose and Alviso neighbors: The city permit for the buildings is a separate process from the CPUC vote. San Jose's Planning Division lists large energy-use projects on its website, so that's the place to watch for hearings and comment periods.
Buyers and sellers: Large employment and infrastructure projects can affect traffic, construction activity and local demand over time. If you're weighing a purchase or sale nearby, it helps to know the project timeline. Talk with a lender or financial professional about anything that affects your own plans.

Power demand from large users is a growing issue across the state. California Wire reported that Gov. Gavin Newsom signed several bills aimed at data centers this fall. San José Spotlight reported that San Jose has about 20 data centers operating, with more under construction or in city review. We'll keep following the CPUC vote and the city's review of the Disk Drive project.

Sources

Thinking about buying or selling in the Bay Area? Chris Renois can walk you through how these changes affect your home and your plans. Call or text (650) 512-9817, email chrisrenois@therealexperts.com, or get a free home value estimate.

This article is general information for Bay Area homeowners and buyers, not legal, tax or financial advice. Laws, rates and deadlines change; please confirm details with the original sources linked above or a qualified professional. Chris Renois, California DRE #02030130.