CA — Power Infrastructure Updated 2026-07-17

California

CAISO Storage Data Center PPAs Transmission Constraints

1) Grid operator and market structure

  • Balancing authority / ISO: The California ISO (CAISO) manages high-voltage grid operations, operates a competitive wholesale electricity market, and oversees transmission planning for most of California. CAISO, accessed 2026-06-10
  • Regional reliability: The Western Electricity Coordinating Council (WECC) is the regional entity for reliability in the Western Interconnection. WECC, accessed 2026-06-10
  • Retail structure: California is partially deregulated on the retail side. Customers may take bundled IOU service or receive supply through Community Choice Aggregation or Direct Access, while IOUs continue to provide delivery service in IOU territories. CPUC, accessed 2026-07-17
  • Direct Access limits: Direct Access remains limited to non-residential customers within a capped historical load amount, so it is a relevant but constrained procurement pathway for large loads. CPUC, accessed 2026-07-17

2) Interconnection queue status and large-load rules

  • Generator queue depth: CAISO’s generator interconnection queue is for generation and storage projects, not load requests. The current large-load issue is therefore not visible as a data-center “load queue” in CAISO’s generator interconnection postings. CAISO, accessed 2026-06-10
  • Data centers as a large-load driver: CAISO states that California faces a surge in electricity demand from new large loads, that data centers present the largest use case, and that utilities are receiving more large-load interconnection and service applications. CAISO, accessed 2026-06-10
  • Load interconnection jurisdiction: CAISO states that retail load interconnections are governed by utility tariffs and local regulators, usually the CPUC for California IOUs; CAISO accounts for these loads through CEC demand forecasts used in studies, forecasts, and network models. CAISO, accessed 2026-06-10
  • CAISO Large Loads initiative: CAISO formally lists the initiative as beginning February 27, 2026. On June 15 it posted a technical-requirements straw proposal and technical-data request; the broader straw proposal, meeting, draft final proposal, and possible Board action were scheduled for August through October. The initiative is considering technical requirements, load forecasting, transmission planning, market integration, co-location, and cost responsibility, but had not produced a final tariff rule by July 17. CAISO, 2026-06-15
  • PG&E’s first data-center pilot cluster reached CAISO review: The May board-approved transmission plan says PG&E’s 2024 Large Load Cluster Study had 11 active data-center projects totaling 840 MW in Santa Clara and Alameda counties, plus three San Jose requests proceeding through serial studies. The cluster comprised 49 MW in De Anza, 494 MW in San Jose, 99 MW in Gilroy, and 198 MW in Mission; CAISO concurred with associated network upgrades, but this study-stage capacity is not equivalent to energized load. CAISO 2025-2026 Transmission Plan, 2026-05-19
  • Federal generator interconnection reforms: FERC Order No. 2023 requires cluster studies, firmer commercial-readiness requirements, and deadlines/penalties for generator interconnection processes; it affects CAISO generation/storage interconnection compliance but does not itself create a retail data-center load queue. FERC, 2023-07-27
  • New federal large-load proceeding affecting CAISO: On June 18, FERC issued CAISO and the other five RTOs/ISOs show-cause orders requiring them within 60 days to justify existing tariffs or propose reforms addressing large-load study processes, transmission cost shifting and transparency, co-location, flexible-load service, and proximate generation; it also required a 30-day generation-adequacy report. This is a pending wholesale-tariff proceeding, not a completed California load-interconnection rule. FERC, 2026-06-18

3) Ratepayer protection (large-load tariffs / cost allocation)

  • PG&E Electric Rule 30 interim decision (A.24-11-007): The CPUC’s July 24, 2025 decision partly granted PG&E interim authority to use Electric Rule 30 for transmission-level retail customers while the broader proceeding remains pending. The interim decision requires new transmission-level customers to be responsible initially for transmission facilities, allows advance/actual-cost payments and pre-funding of specific transmission network upgrades, denies interim refunds and interest, and authorizes no rate recovery as part of the interim decision. CPUC D.25-07-039, 2025-07-24
  • Rule 30 proceeding status: The July 2025 decision left deferred cost-causation and cost-allocation issues for a later decision in A.24-11-007. PG&E, Microsoft, the Public Advocates Office, and TURN filed a joint motion for partial settlement on May 7, but a July 2 draft resolution still referred to the “next Decision” in A.24-11-007; therefore, interim Rule 30 remained in place and final issues were unresolved as of July 17. Joint motion for partial settlement, 2026-05-07; CPUC draft Resolution E-5455, 2026-07-02
  • Google 250 MW exceptional-case agreement reached the voting agenda, but the reviewed resolution was not yet final: Draft Resolution E-5455 would approve, with modifications, PG&E’s agreement to provide 230 kV retail service to Google’s facilities at 5079 Disk Drive in San Jose, forecast at 250 MW at full build, with construction planned for January 2027 and service in December 2028. It would cap annual refunds of energization advances at annual net customer revenue plus the income-tax adjustment, require separate treatment of broader transmission-network upgrades through a Tier 2 advice letter, and require additional cost-cap reporting. The CPUC’s July 14 agenda placed E-5455 on the July 16 consent agenda; because the available resolution still carried a “DRAFT” label and blank adoption fields, this file does not characterize it as finally adopted as of the July 17 cutoff. CPUC draft Resolution E-5455, 2026-07-02; CPUC Public Agenda 3584, 2026-07-14
  • New CPUC large-load rulemaking: In R.26-04-009, issued April 10, 2026, the CPUC opened a ratesetting rulemaking to consider the impacts of large-load customers on electrical systems and customer rates, including whether data-center-specific or other large-load rate designs are needed, how to prevent cost shifts, and whether other states’ data-center customer classes or tariffs should apply in California. CPUC R.26-04-009, 2026-04-10
  • R.26-04-009 status: The CPUC held its prehearing conference on June 18, with parties addressing definitions, cost causation, marginal costs, data needs, and whether tariffs should apply to data centers specifically or large loads generally. The proceeding remained in its initial scoping/record-development phase; no substantive tariff or cost-allocation decision had issued by July 17. CPUC prehearing conference transcript, 2026-06-18
  • Imperial Irrigation District proposed Large Load Tariff: IID released a proposed tariff for a 30-day review beginning May 12. It would apply to requests of at least 20 MW with a proposed capacity factor above 85% and require the customer to pay study costs, execute reimbursement/electric-service/special-facilities agreements, provide deposits and collateral, accept minimum contract terms and exit fees, and fund required transmission, distribution, generation, and other system upgrades. IID reported nine proposals or inquiries at varying stages. The release said staff would return after review with a final proposal, so this remained proposed—not adopted—on the reviewed record as of July 17. IID is a public utility outside CPUC retail-rate jurisdiction, making this a distinct local rate-setting track. Imperial Irrigation District, 2026-05-12
  • Pending legislative rate/tariff proposals: SB 886 and SB 1168 advanced to Assembly Appropriations, while SB 978 remained held in Senate Appropriations. SB 886’s July 2 version would require CPUC tariffs with upfront cost responsibility and a 10-year prefunded zero-carbon contract. SB 1168’s June 15 amendments removed the proposed gas/electric surcharges and fund, leaving a CPUC rate-structure assessment. None had been chaptered by July 17. California Legislative Information, 2026-07-02; California Legislative Information, 2026-06-15; California Legislative Information, accessed 2026-07-17
  • Independent policy recommendation: The Little Hoover Commission’s March 2026 data-center report recommended that data centers pay the full grid costs they impose, including through special tariff/rate structures, prepayment for needed infrastructure, and stronger facility-level reporting. Little Hoover Commission, 2026-03-03; CalMatters, 2026-03-05

4) Generation adequacy (projects and supply outlook)

  • CEC forecast role: The CEC develops the statewide Energy Demand Forecast used by the CPUC, CAISO, and utilities for procurement, transmission, distribution planning, reliability, and affordability decisions. CEC, accessed 2026-06-10
  • CPUC ordered 6 GW of new clean capacity after incorporating data-center-driven load growth: On February 26, the CPUC adopted an IRP decision requiring load-serving entities to procure 2,000 MW of net qualifying capacity by June 2030, another 2,000 MW by June 2031, and another 2,000 MW by June 2032, all from clean generation or storage; at least 25% must have clean-firm and/or long-duration-storage attributes. The decision says the 2028-2032 forecast increase was “much of it related to data centers,” alongside transportation/building electrification and weaker behind-the-meter assumptions, but expressly declined to prejudge data-center cost allocation. CPUC D.26-02-057, 2026-02-26; CPUC, 2026-03-02
  • Final 2025 IEPR materially increased the forecast: The CEC adopted the report on July 8, 2026. Using utility data through December 2025, it estimates that data-center maximum demand on the CAISO system rises from about 1,000 MW in 2024 to approximately 5,800 MW by 2040 in the mid/planning case and 8,400 MW in the high/local-reliability case. These values supersede the earlier 4,500 MW figure in this file. CEC, 2026-07-08
  • Requested capacity is much larger than expected demand: The CEC’s April 15, 2026 methodology memo reports 23,278 MW of data-center capacity requests as of December 2025, including 5,086 MW with signed service agreements, 9,587 MW in active applications, and 8,604 MW in pre-application inquiries; the memo emphasizes that requested service capacity is not expected operating demand and must be adjusted for utilization, confidence, and ramping assumptions. CEC, 2026-04-15
  • Planning versus local reliability scenarios: The 2025 IEPR data-center methodology uses a mid/planning scenario for resource adequacy, IRP, and system transmission planning, and a high/local-reliability scenario for local resource adequacy, CAISO local transmission planning, and IOU distribution planning. CEC, 2026-04-15
  • Energy-consumption range: The adopted IEPR projects California data-center electricity consumption of about 40,000 GWh in 2040 in the mid case and 57,000 GWh in the high case. Because the forecast is based on projects already in utility queues, growth plateaus in the mid-2030s when those identified projects are exhausted; it is not an unconstrained long-term market forecast. CEC, 2026-07-08
  • Clean-energy policy position: CEC states that data centers do not change California’s 100% clean-electricity goal by 2045, but the rapid growth of data centers creates new challenges for demand forecasting and grid planning. CEC, accessed 2026-06-10

5) Utility load forecasts & IRP linkages

  • Utility-reported energization requests: The CEC’s 2025 IEPR methodology uses utility-reported energization requests from Silicon Valley Power, Palo Alto, PG&E, SCE, SDG&E, Burbank, and Valley Electric Association to create project-based forecast scenarios. CEC, 2026-04-15
  • CAISO/CEC forecast linkage: CAISO states that, under the 2022 CEC-CPUC-CAISO MOU, CEC demand forecasts and CPUC resource-planning portfolios feed into CAISO’s transmission planning process; large loads are mapped to substation locations used in ISO transmission studies. CAISO, accessed 2026-06-10
  • Large-load forecast transparency: CAISO notes that transparency and early communication of expected load growth are critical for proactive planning and that it is working with CEC and CPUC on refinements to large-load processes. CAISO, accessed 2026-06-10
  • PG&E pipeline update: PG&E reported on April 23 that approximately 4.6 GW of data-center projects in its service territory had reached final engineering as of the end of March. Its earnings materials also showed substantial movement and attrition across preliminary, final-engineering, and construction stages, reinforcing that requested capacity is not equivalent to energized load. PG&E Corporation, 2026-04-23

6) Behind-the-meter, co-location, and direct procurement pathways

  • CEC permitting boundary: CEC does not permit data centers themselves, but it has jurisdiction over some associated energy infrastructure, including thermal generation facilities of 50 MW or larger, small power plant exemptions, and the optional clean-energy opt-in certification program. CEC, accessed 2026-06-10
  • Backup-generation example: STACK’s SVY03A Data Center Campus in Hayward includes backup generators totaling up to 76.6 MW and associated on-site electrical infrastructure, illustrating how data-center projects can trigger CEC backup-generating-system review even when the data center building itself is locally permitted. CEC, accessed 2026-06-10
  • New hydrogen/BTM example: ECL announced a 35 MW Santa Clara data center that would combine grid electricity, natural gas, storage, and behind-the-meter hydrogen power blocks, with an initial 2.5 MW IT-capacity phase. On July 13, ECL and PowerCell disclosed a firm fuel-cell-system order with first deployments planned for the Santa Clara campus; a separate nonbinding 300 MW memorandum covers ECL’s broader U.S. portfolio and should not be counted as 300 MW of California capacity. Data Center Dynamics, 2026-04-22; Data Center Dynamics, 2026-07-13
  • Golden Valley behind-the-meter proposal: Beacon Data Centers and California Resources Corporation announced a 275 MW Kern County campus intended to use CRC’s existing Elk Hills gas-fired power plant behind the meter, with grid connections and fifteen 2.5 MW diesel generators as backup. This is an announced proposal, not an approved or operating 275 MW load. Data Center Dynamics, 2026-06-24
  • New CEC backup-generation review: R&L Capital’s proposed RB Inyokern facility entered CEC small-power-plant-exemption review as 26-SPPE-01. It would use forty diesel generator sets for up to 99 MW of emergency generation and a dedicated SCE-connected substation; the application remained under review on July 17. California Energy Commission, accessed 2026-07-17
  • Direct procurement: Eligible non-residential customers can use Direct Access to buy power from ESPs subject to statutory caps, while IOUs provide delivery service; this remains a constrained but relevant pathway for large-load procurement. CPUC, accessed 2026-07-17

7) Transmission constraints and upgrades relevant to data centers

  • CAISO approved a load-growth-heavy transmission plan: On May 19, the CAISO Board approved 38 projects with an estimated $6.7 billion full-buildout cost over the next decade. CAISO said more than half the projects and more than half the cost were driven by forecast load growth, with data centers among the drivers, and identified the Tesla-Trimble-Metcalf 230 kV corridor expansion among the Greater Bay Area upgrades. CAISO, 2026-05-19
  • Data-center interconnection upgrades are now itemized: For PG&E’s 840 MW pilot cluster, CAISO’s plan identifies upgrade packages with estimated ranges from $69-$138 million for a 49 MW Lockheed-area interconnection to $276-$552 million for a multi-project Charcot/Trimble package, with expected interconnection or capacity-upgrade dates from 2027 through 2031. Several packages serve multiple applications and overlap, so their ranges should not simply be summed or assigned to a single facility. CAISO 2025-2026 Transmission Plan, 2026-05-19
  • South Bay/Bay Area transmission pressure: The Public Advocates Office reported that CAISO approved South Bay Area transmission network upgrades in May 2025 largely intended to serve 2.5 GW of concentrated data-center and electrification load growth between 2026 and 2039, with costs exceeding $2 billion, and warned that direct interconnections can range from a few million dollars to more than $100 million per project. Public Advocates Office, 2025-10-27
  • San Jose infrastructure planning: San Jose’s economic-development materials state that PG&E is proposing $1.5 billion of South Bay infrastructure improvements to increase capacity for data-center-related load, including projects increasing capacity in San Jose. City of San Jose Office of Economic Development and Cultural Affairs, accessed 2026-06-10
  • CAISO large-load planning concern: CAISO’s Large Loads page states that uncertainty remains around whether large-load applications will materialize and how they will operate, and that the ISO is exploring modeling, short-term forecasting, and market-integration approaches for large loads. CAISO, accessed 2026-06-10

Notes & limitations

  • CAISO’s generator interconnection queue should not be used as a data-center load queue. Data-center load interconnections are primarily governed by utility tariffs and CPUC or local regulation, while CAISO incorporates large loads through CEC forecasts and transmission-planning assumptions. CAISO, accessed 2026-06-10
  • The CEC’s 23.3 GW figure is requested service capacity, not expected operating demand. CEC applies utilization, confidence, and ramping assumptions because many projects may not be built or may operate below requested capacity. CEC, 2026-04-15
  • As of July 17, 2026, R.26-04-009 remained at the prehearing/scoping stage, A.24-11-007 still operated under interim Rule 30 pending a later decision, IID’s separate public-utility tariff had been released for review, and CAISO/FERC large-load reforms were pending rather than final. CPUC prehearing conference transcript, 2026-06-18; CPUC draft Resolution E-5455, 2026-07-02; CAISO, 2026-06-15; FERC, 2026-06-18