--- title: "PG&E has a 12.87GW AI power queue and a $2 billion hole, so Google pays first and ratepayers pay later" description: "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." publisher: "The Inference" section: "Power" published: 2026-10-30T13:41:27.401Z modified: 2026-10-30T13:41:27.401Z canonical: https://theinference.org/article/pg-e-has-a-12-87gw-ai-power-queue-and-a-2-billion-hole-so-google-pays-first-and-ratepayers-pay-later language: en keywords: "PG&E, Google, Data Centers, Utilities, California" --- # 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. 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](https://www.datacenterdynamics.com/en/news/pge-sees-marginal-increase-in-data-center-pipeline/), 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]. *Chart: **Nearly all of PG&E's 12.87GW data-center queue is still paperwork: only 0.24GW is under construction** Bars ranking PG&E's data-center interconnection pipeline by phase as of the Q3 2026 earnings call: 8.35GW in application and preliminary engineering, 3.88GW in final engineering, 0.4GW at interconnection construction agreements, and 0.24GW under construction.* *PG&E's data-center interconnection queue by phase, in gigawatts, as reported on its third-quarter 2026 earnings call. The bar in gold is work under construction; everything else is awaiting engineering or agreements. Source: Data Center Dynamics. [2]* ## The utility that cannot afford to build [PG&E](https://theinference.org/markets/companies/pg-e-corporation) 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](https://finance.yahoo.com/markets/stocks/articles/pacific-gas-electric-q3-earnings-220417754.html), 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. *Chart: **Capex kept climbing to $3.3 billion a quarter even as PG&E cut its 2027 plan by $2 billion** Column chart of PG&E's quarterly capital expenditure from Q3 2024 to Q3 2026, rising from $2.3 billion to $3.3 billion.* *Quarterly capital expenditure in billions of US dollars, from PG&E Corporation's SEC filings, Q3 2024 through Q3 2026. Spending has risen through 2026 even as the company cut its 2027 plan by $2 billion on financing constraints. Source: PG&E Corporation, quarterly figures from its SEC filings, retrieved 30 October 2026. [4]* ## 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](https://www.mercurynews.com/2026/10/29/google-pge-san-jose-tech-economy-jobs-data-ai-build-property-develop/), 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](https://theinference.org/markets/companies/alphabet) 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](https://theinference.org/article/dte-energy-s-1-gigawatt-google-deal-set-michigan-s-data-center-template-more-deals-by-year-end): hyperscalers fund the interconnections the utility's credit rating cannot, and the funnel of 12.87 gigawatts becomes billable assets [1][2]. 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 [1][2]. ## Takeaway PG&E's Q3 call sized the AI power queue at 12.87GW but left the utility too stretched to build it, so Google is paying $150 million up front for its San Jose interconnection, money it gets back as the cost lands in the rates other customers pay. ## Sources 1. [The Mercury News, Google agrees to pay $150 million for cost of PG&E connection in San Jose, 29 October 2026](https://www.mercurynews.com/2026/10/29/google-pge-san-jose-tech-economy-jobs-data-ai-build-property-develop/) 2. [Data Center Dynamics, PG&E sees marginal increase in data center pipeline, 29 October 2026](https://www.datacenterdynamics.com/en/news/pge-sees-marginal-increase-in-data-center-pipeline/) 3. [MarketBeat via Yahoo Finance, Pacific Gas & Electric Q3 Earnings Call Highlights, 22 October 2026](https://finance.yahoo.com/markets/stocks/articles/pacific-gas-electric-q3-earnings-220417754.html) 4. [PG&E Corporation, quarterly figures from its SEC filings, retrieved 30 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001004980) --- PG&E has a 12.87GW AI power queue and a $2 billion hole, so Google pays first and ratepayers pay later — The Inference. Canonical: https://theinference.org/article/pg-e-has-a-12-87gw-ai-power-queue-and-a-2-billion-hole-so-google-pays-first-and-ratepayers-pay-later