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Officials warn data‑center buildout is a major driver of future electricity demand; agencies seek better forecasting and rate design
Summary
Energy officials told the committee that hundreds of gigawatts of data‑center interconnection interest exists on the books and that technical teams currently plan for about 5,000 MW of data‑center load by 2045 (8,000 MW for local reliability cases), noting both opportunities for demand flexibility and risks from backup generation.
Panelists told the Assembly that data centers are a growing and uncertain source of new demand that must be incorporated into planning and rate design. Staff said there is a pipeline of interconnection applications representing roughly 25,000 MW of potential new data‑center load, but that the technical view currently bakes in about 5,000 MW system‑wide by 2045 for planning purposes.
Officials discussed tools to manage impacts and costs: CPUC staff noted an "advanced rate design" rulemaking and work under SB 57 to allocate costs and encourage flexible behavior; CAISO and CPUC staff said data centers can provide demand flexibility or use backup generation in emergencies, but local impacts and cost allocation merit careful design. "Data centers showed a potentially 5 to 10% reduction just through using the compute differently," one panelist said when describing the technical potential for demand flexibility.
Committee members and stakeholders urged faster interconnection processes, careful cost allocation for necessary transmission upgrades, and coordination with FERC and participating transmission owners to make sure upgrades and allocations are timely and fair.
