Data Center Requests Would Grow California's Power Use by Half Overnight

Data Center Requests Would Grow California's Power Use by Half Overnight
What would happen if California's electricity use jumped by half overnight? That is roughly the scale of what data center developers have requested from the grid.

The numbers
California used about 246 billion kilowatt-hours of electricity in 2024, according to the U.S. Energy Information Administration. Data center developers have asked PG&E for about 15,000 megawatts of power. If all of it ran at full power year-round, that would be about 131 billion kilowatt-hours a year, equal to about 53 percent of everything California uses today. These are requests, and not all will be built. But signed agreements reached about 4,000 megawatts by the end of 2025, and Southern California Edison has nearly 5,000 megawatts of data center requests in its queue.

Growth on top of growth
Data centers are not the only source of new demand. Electric vehicles, heat pumps and electric appliances are adding load too. The California Energy Commission projects statewide electricity use could rise more than 50 percent by 2045. Growth of that size requires a dramatic expansion of the grid: new transmission lines, new substations and new generation. Those investments are paid for over time, largely through electricity rates.

Why rates are under pressure
California already pays some of the highest electricity prices in the country, about 30 cents per kilowatt-hour on average, second only to Hawaii. Utilities argue that new large customers can help spread fixed costs. Consumer advocates warn that if data center projects fall short, ratepayers could be left covering billions in infrastructure costs. Either way, homeowners who depend entirely on the grid have little control over what happens next.

Choosing your side of the meter
As AI drives up demand, homes will be on one side of the meter or the other. On the buying side, you pay whatever the grid charges. On the supply side, you produce your own solar power, store it in a battery, and send extra energy back to the grid for compensation. Some homeowners do not like the idea of supplying the grid that powers data centers. But it is better than being on the other side of the meter, absorbing the cost of growth.

Getting started without a purchase
Qualifying homeowners can get solar and battery storage through third-party ownership programs without buying or financing equipment. Many agreements offer a rate designed to come in below utility rates, include maintenance and battery replacement for the term, and can transfer to a new owner if the home sells.

The takeaway
Data center requests alone could grow California's power use by half. Homeowners can hedge against that growth with savings that can reach up to 40 percent compared with utility rates, depending on the home and program.

To find out if your home qualifies for a TPO solar and battery program, visit myhomesolution.org/california_public_utility_commissions