PG&E has a 12.87GW AI power queue and a $2 billion hole, so Google pays first and ratepayers pay later
PG&E's Q3 call put hard numbers on California's AI power queue: 12.87 gigawatts of data-center requests, 240 megawatts under construction, a $2 billion capital plan cut, and a Google advance that the filing says ends up on ratepayers' bills.
Vincent Jiang · 2 min read
California wants AI data centers, and the power queue shows it. On its third-quarter earnings call, PG&E, the utility serving Northern and Central California, reported 12.87 gigawatts of data-center connection requests, up from 12.71 gigawatts in July 2. What has actually been built is a rounding error beside that: 240 megawatts under construction, up from 140 in June, and 174 megawatts brought online since 2024 2.
Nearly all of PG&E's 12.87GW data-center queue is still paperwork: only 0.24GW is under construction
Data
| Value | |
|---|---|
| Application and preliminary engineering | 8.35GW |
| Final engineering | 3.88GW |
| Interconnection construction agreements | 0.4GW |
| Under construction | 0.24GW |
The utility that cannot afford to build
PG&E−0.68% — PG&E, down 0.68 percent today would like to serve that queue, and said on the call it is planning for 1.8 gigawatts of data-center demand online by 2030 2. The problem is money. The company cut its 2027 capital plan by $2 billion, to $11.4 billion, citing financing constraints, and warned customers that some projects, including connections for new power demand, could be delayed 3.
Its credit sits below investment grade, and debt issued in that condition since 2017 will add about $4 billion of interest expense over the life of the financing 3. Meanwhile the quarter itself earned $2.285 billion, up from roughly $4 million a year earlier 2. Earnings are fine; borrowing is the bottleneck.
Capex kept climbing to $3.3 billion a quarter even as PG&E cut its 2027 plan by $2 billion
Data
| Capital expenditure, $B | |
|---|---|
| Q3 '24 | $2.61B |
| Q4 '24 | $2.83B |
| Q1 '25 | $2.64B |
| Q2 '25 | $3.07B |
| Q3 '25 | $2.93B |
| Q4 '25 | $3.16B |
| Q1 '26 | $3.36B |
| Q2 '26 | $2.97B |
| Q3 '26 | $3.3B |
Google's $150 million workaround
Enter a customer who does not need to borrow. Google has agreed to pay $600,000 per megawatt up front, $150 million, to cover the transmission connection for a 250-megawatt building at its Meadow Point campus at 5079 Disk Drive in North San Jose, where construction has already started 1. PG&E's own public estimate for the build portion is $64 million to $137 million 1.
State regulators judged the $600,000 rate appropriate to protect ratepayers from general transmission costs, and the California Public Utilities Commission is scheduled to rule this year; construction would follow about six months later and take roughly two years 1.
Who ends up holding the bill
Read the filing's own words. "As a customer is refunded, the related capital costs are added to PG&E's accounts and ultimately recovered from ratepayers" 1. Google−1.38% — Google, down 1.38 percent today advances the cash now, gets paid back over time, and the capital lands in the rate base that California electricity customers finance.
For PG&E investors the structure is a template: hyperscalers fund the interconnections the utility's credit rating cannot, and the funnel of 12.87 gigawatts becomes billable assets 12. For everyone else with a PG&E bill, the queue is the price tag. Watch the CPUC ruling expected this year; approval would make the Google model the default for the next 12 gigawatts of requests 12.
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