San Jose council accepts status report on planned data centers after hours of public comment

The San Jose City Council unanimously accepted a staff status report on proposed data‑center development and related electrical and water infrastructure at its April 21 meeting.

City staff described a cross‑departmental program to coordinate with PG&E on transmission upgrades and to streamline permitting for large energy users, while stressing that no individual data centers were being approved at this meeting. Staff said two projects have already been energized and that several transmission upgrades are planned between 2028 and 2034 to add regional capacity.

The presentation stressed that proposed projects will undergo environmental review under CEQA and local permitting processes. City staff said they will require project‑level environmental studies (air quality, greenhouse gases, water‑supply assessments) and noted that as projects exceed certain thresholds (for example 50 MW), additional state review may apply and the California Energy Commission becomes a participant in the review process.

Public comment consumed much of the meeting. Dozens of residents, youth climate advocates and environmental groups urged the council to pause or tightly condition approvals, citing concerns about potable‑water demand, the potential for localized air pollution from backup generators, habitat loss, and the adequacy of community engagement. Rosemarie Grantham, a longtime local advocate, told the council, “We don't want more data centers like these companies,” echoing calls from others for stronger guarantees that recycled water will be used and for more robust multilingual outreach.

Labor and construction leaders spoke in favor of moving forward, saying projects will create construction jobs and steady revenue. An assistant business manager for UA Local 393 said the projects will generate “high quality construction and permanent jobs” and support the local tax base.

Councilmembers pressed staff on a range of technical issues: how Rule 30 (a pending CPUC filing on cost allocation for transmission upgrades) could affect who bears upfront costs; how network upgrades would be allocated across utilities; and how the city will prioritize recycled water and protect groundwater and nearby habitats. Staff said Rule 30 is primarily about who pays upfront for certain distribution and transmission upgrades and that a separate CPUC proceeding on rates is expected to examine large‑load customer rate design. Staff also reiterated that project‑specific CEQA reviews and discretionary permits will allow city staff and the public to identify mitigations, and that significant impacts would typically require an Environmental Impact Report and a public hearing.

Councilmembers emphasized that San Jose can set stronger local conditions than jurisdictions that have allowed much larger facilities. Councilmember Ortiz noted the city's budget pressures and the potential revenue benefits of attracting large users, but added that residents’ concerns about water and health must be addressed. After discussion, Councilmember Cohen moved to accept the report. The motion passed unanimously.

What comes next: staff said the city will continue to pursue grant funding and to coordinate with PG&E, VTA and regional partners; individual development proposals will continue to proceed through project‑level CEQA, community outreach and permitting. The council asked staff to produce clearer, plain‑language outreach materials and to prioritize recycled‑water use where feasible as projects move through permitting.