California Utilities Have a Solution to Soaring Energy Prices: More Data Centers
PG&E believes more data centers may be the key to repairing the price crunch in California.
April 28, 2026 – As California’s energy prices continue to rise, utilities have a unique solution that may surprise: More data centers.
If everyday customers are on the same power grid as large data centers, won’t ratepayers bear that expensive burden? It’s actually the exact opposite, according to Pacific Gas and Electric (PG&E), the energy utility that covers most of California. Instead, the utility argued that data centers might be able to offset costs and put downward pressure on prices for all ratepayers.
PG&E is moving full steam ahead on this approach. In January, PG&E cut the ribbon celebrating the first of a dozen large‑load customers. In San Jose, PG&E and data center company Equinix sent a message loud and clear: large energy users will lower bills for everyone.
Arquelle Shaw, president of the Americas for Equinix, a data center company, said at the ribbon cutting ceremony that it was incumbent on the data center industry to ensure they cover their share of costs and services and pursue the path that leads to lower energy rates for everyone.
“Historical data [shows] states or utilities that have experienced the most growth in electricity demand over the last 5 or 6 years, are also the states that tended to see their electricity prices decrease by the most in inflation adjusted terms.” said Ryan Hledik, co-leader of energy regulatory economics, finance and rates for Brattle Group, backing up Shaw and PG&E’s perspective.
California’s electricity rates have risen faster
According to a study produced by regulatory research firm Brattle Group and Lawrence Berkeley National Lab, California’s rates experienced a disproportionate rise compared to other states between 2019 and 2024, mostly due to wildfire hardening.
