PG&E Begins Energy Infrastructure Upgrades to Bring San Jose's Net Zero Community to Life

PR Newswire

Wed, Apr 9, 2025, 10:30 AM 4 min read

SAN JOSE, Calif., April 9, 2025 /PRNewswire/ -- Today, Pacific Gas and Electric Company (PG&E) and real estate developer Westbank announced two major milestones in the development of Silicon Valley's innovative net-zero community. PG&E infrastructure upgrades have begun, and Westbank has launched a global call for data center partners to join the initiative.

Eastdil Secured, a global real estate investment bank, will lead the process of identifying partners who support using data centers to enhance communities.

Westbank's project will pair three data centers with up to 4,000 residential units to create a sustainable downtown San Jose. Excess heat from the data centers will be harnessed and repurposed through a district energy system to heat and cool surrounding buildings. The plan addresses the growing demand for artificial intelligence (AI)-driven data centers and housing while advancing San Jose's net-zero goals.

"The Silicon Valley Initiative is about the evolution of energy, housing and AI infrastructure – it will create a more inspiring and sustainable community that demonstrates leadership globally. In PG&E and the City of San Jose, we have found collaborators who share our vision and commitment. We're looking forward to working together to bring this initiative to life," said Westbank CEO Ian Gillespie.

On April 8, the San Jose City Council unanimously approved the advancement of the first two data centers, marking a significant step toward their development, with the first data center expected to come online in late 2027.

"Demand for new data centers is off the charts and will enable a more efficient and convenient future for everyone, but convenience doesn't matter if we destroy the planet in the process," said San Jose Mayor Matt Mahan. "This innovative partnership will allow us to harness data center demand to build much needed workforce housing and ensure it is powered by excess heat from the data centers. I can't think of a more creative or important breakthrough for our future than this."

PG&E has started infrastructure upgrades for delivering approximately 200 megawatts of power to the three data centers. The improvements include rebuilding a key substation and making several transmission interconnection and capacity enhancements that will position San Jose for continued growth and innovation.

"PG&E's infrastructure projects will have a far-reaching impact beyond the net zero community. They will support San Jose's new rail service, incoming developments and the electrification of homes and vehicles," said Michael Medeiros, vice president of South Bay Delivery for PG&E. "These upgrades will help ensure San Jose continues to lead and stay ahead in sustainability."

The Net Zero community groundbreaking is anticipated for later this Spring, beginning with rehabilitating the ~100-year-old Bank of Italy. The building will include all-electric mechanical, electrical and plumbing systems, as well as new energy-efficient windows. The building will also include 114 residential homes and will integrate into the district energy system.

"This initiative represents a bold new approach to energy, housing and economic transformation. As a key infrastructure partner for California, PG&E is proud to play a pivotal role in this effort—integrating advances in data centers and AI with district energy to build more resilient, low-carbon communities of the future," said Teresa Alvarado, vice president for PG&E's South Bay and Central Coast Region.

Additional benefits of the Net Zero Community include:

Reduced energy bills for businesses and residents by utilizing recycled heat from data centers.
More efficient use of electricity powering the data centers.
Decarbonization of buildings connected to the district energy system.

About PG&E

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE: PCG), is a combined natural gas and electric utility serving more than 16 million people across 70,000 square miles in Northern and Central California. For more information, visit pge.com and pge.com/news

About Westbank

Westbank is a practice dedicated to the creation of inspiring environments, with a body of work that includes residential, hotels, retail, workspace, district energy, affordable housing, exhibitions and public art. The net zero community in San Jose is being developed in partnership by Westbank, Peterson and OPTrust.