Is the Golden Pacific Powerlink an AI Infrastructure Project in Disguise?
Investigative Analysis | Golden Pacific Powerlink / AI Data Centers / Ratepayer Risk | May 2026
Follow the Load — Investigative Analysis
SDG&E flatly denies any connection between its proposed $2.3 billion Imperial Valley–to–Orange County transmission line and the flood of AI data center proposals now targeting Imperial Valley. The facts on the ground tell a more complicated story — and California's own regulators are sounding alarms.
When Imperial Valley residents pressed SDG&E at its May 2026 open houses about whether the Golden Pacific Powerlink was designed to power AI data centers, project director Erica Martin gave a response that was technically accurate and strategically incomplete: "There's no particular source that's driving the need for this project."
That is the official position. It is also the position that regulators, consumer advocates, and environmental lawyers across California are being paid to scrutinize. Because at the same moment SDG&E was holding its virtual open houses, a $10 billion hyperscale data center was winding through a contentious permit fight in the city of Imperial — less than a mile from where the Golden Pacific Powerlink begins. A second $5.5 billion data center complex was proposed on 315 acres of Imperial Valley farmland. A third wave of inquiries was crowding utility interconnection queues across the state.
The question is not whether SDG&E is lying. It is whether the transmission planning process — specifically CAISO's 2022–23 plan that authorized this project — adequately accounted for, disclosed, or assigned costs for what is now a tidal wave of AI-driven electricity demand. And crucially: who pays when the same wire serves both a data center and a residential customer?
- 4.9 GW CEC forecast data center load growth in CAISO territory by 2040
- 4.5 GW Data center demand currently under study in CAISO's 2025–26 transmission planning cycle
- $7B Estimated cost of 38 transmission upgrades in CAISO's draft 2025–26 plan, driven in part by data centers
- 330 MW Power demand of the proposed IVCM data center in Imperial — nearly the residential load of a mid-sized city
- 40% Jump in data center hookup requests reported by PG&E in early 2025
- $2B+ Cost of CAISO-approved South Bay transmission upgrades to serve just 2.5 GW of data center load
The Imperial Valley Ground Truth
Two major data center projects are currently proposed within the footprint of the Golden Pacific Powerlink's originating substation:
Imperial Valley Computer Manufacturing (IVCM): A $10 billion, nearly 1 million square-foot computing warehouse proposed within blocks of residential homes in the small city of Imperial. Its developer, Sebastian Rucci, estimates the facility would consume 330 megawatts of power — roughly equal to the entire residential electricity consumption of Imperial County in 2024, by some estimates. The project would also use approximately 750,000 gallons of water per day. Rucci has stated his intention to build multiple data centers in Imperial County, describing the region as "the premier place in the state for a project like this." In April 2026, the Imperial County Board of Supervisors voted 4-1 to advance the project — over the objections of the City of Imperial, which has sued to force a full CEQA environmental review.
CalEthos: A separate $5.5 billion, 315-acre complex on Imperial Valley farmland, explicitly intended for AI computing and described as being powered by geothermal and solar energy — the exact resource mix CAISO identified as justification for the Golden Pacific Powerlink.
Together, these two projects alone represent more than a gigawatt of potential load — originating within miles of the Imperial Valley Substation where the Powerlink begins. Neither project existed in its current form when CAISO's 2022–23 Transmission Plan was finalized in May 2023.
I can only imagine the rates going up once that data center is up and running.
What the Official Numbers Actually Show
CAISO and the California Energy Commission are not blind to the data center surge. Their own official documents reveal a planning challenge that is growing faster than the transmission infrastructure designed to address it.
As of January 2026, the CEC's official forecast projects data center load growth in the CAISO balancing area of 1.8 GW by 2030 and 4.9 GW by 2040. But in the same month, CAISO's Large Load Issue Paper acknowledged that utilities are receiving "an increasing number of large load interconnection and service applications" — and that approximately 4.5 GW of data center demand is currently being studied in the 2025–26 transmission planning cycle. The gap between the official forecast (1.8 GW by 2030) and what is actually in the interconnection queue (4.5 GW currently being studied) reflects the fundamental opacity problem: data center developers submit speculative applications across multiple sites without being required to commit, and those speculative requests inflate the forecasts that drive transmission investment decisions.
PG&E's data is even starker: the state's largest utility reported that data center grid connection requests in its territory alone already exceed 10% of California's total current generation capacity. CAISO's own draft 2025–26 Transmission Plan — released in April 2026 and pending Board of Governors approval on May 19 — identified 38 additional transmission upgrades costing $7 billion, driven in part by data center load growth.
CAISO acknowledges that "large-load growth in combination with DERs are a major variable in short-term demand forecasting" and that "without visibility into large load and DER-driven demand changes, the ISO may need to rely" on less accurate forecasting methods. The paper also admits it "will not be possible in many instances to distinguish between which networked facilities were triggered by the load or by the generation" — meaning the cost allocation line between data center infrastructure and general grid upgrades is inherently blurry.
The Transmission Planning Timeline Problem
SDG&E's denial of a data center connection relies on a specific and accurate fact: the CAISO 2022–23 Transmission Plan that authorized the Golden Pacific Powerlink was finalized in May 2023 — before most of the Imperial Valley data center projects were publicly announced. The planning process used CEC demand forecasts that reflected electrification of transportation and buildings, not a sudden surge of hyperscale AI computing. On that narrow technical question, SDG&E is correct.
But the argument cuts both ways. The 2022–23 planning cycle that authorized the Powerlink is now two years old. The CEC's demand forecasts have been revised upward significantly since then — from a 2023-era projection to a January 2025 forecast showing CAISO peak demand rising from 48.3 GW in 2024 to approximately 68 GW by 2040, with data centers cited as a major driver of the increase. CAISO's own draft 2025–26 Transmission Plan reflects load growth of 15 GW by 2035 and 20 GW by 2040, requiring more than 74 GW and 107 GW of installed resource capacity respectively.
What this means in practice: the Golden Pacific Powerlink was authorized under a demand forecast that has since been substantially revised upward — largely because of data centers. The project now being built, if approved, will serve a load environment that looks materially different from the one that justified its approval.
A 500 kV transmission line that connects Imperial Valley's renewable generation hub to the Southern California grid will serve whatever load connects at either end. If data centers concentrate at the Imperial Valley Substation — as is actively happening — they become the de facto primary beneficiary of increased transmission capacity, regardless of what the CAISO planning documents say about the project's purpose. The electrons, as SDG&E correctly notes, are "neutral." The cost allocation, however, is not.
Who Pays? The Socialization Problem
Here is where the consumer interest sharpens into direct financial harm. Under current FERC ratemaking rules — rules that govern how CAISO allocates costs — the costs of major transmission network upgrades are socialized across all ratepayers within the CAISO territory. If the Golden Pacific Powerlink is built, its cost is spread across SDG&E, SCE, PG&E, and other CAISO-jurisdiction customers. If that same transmission capacity disproportionately benefits AI data centers in Imperial Valley — which, by their nature, are among the most electricity-intensive commercial operations on earth, consuming 10 to 50 times more energy per square foot than a typical office building — then ordinary residential ratepayers in San Diego, Los Angeles, and San Francisco are subsidizing the infrastructure of trillion-dollar technology companies.
The California Public Advocates Office — the CPUC's independent ratepayer advocate — documented this problem explicitly in an October 2025 report. In May 2025, CAISO approved a cluster of transmission upgrades in the South Bay area primarily to serve 2.5 GW of data center and electrification load growth between 2026 and 2039, at a cost exceeding $2 billion. The Public Advocates Office noted that speculative data center interconnection requests "can inflate load forecasts and lead to potential overbuilding" — and that even after a data center interconnects, the risk that "it could terminate service or use much less energy than expected" remains. If that happens, ratepayers are left holding stranded infrastructure costs.
The costs that data centers impose on the electrical grid should be paid by the centers themselves, not by average California families already struggling with high utility bills.
Five Key Findings
- The Powerlink was authorized before the data center boom — but will be built into it - The CAISO 2022–23 Transmission Plan precedes most Imperial Valley data center proposals. But the project won't be built until the early 2030s — by which time Imperial Valley data center load could be substantial. The line will serve whatever connects to it. Planning documents do not bind physics or economics
- Demand forecasts have been revised sharply upward — primarily because of data centers - The CEC's 2025 forecast raised projected CAISO peak demand from prior estimates to approximately 68 GW by 2040, with data centers as a primary driver. CAISO is now studying 4.5 GW of data center demand in its current planning cycle — more than double the CEC's formal 2030 forecast. The gap suggests the official numbers are lagging behind reality.
- California's ratepayer protection legislation was gutted by industry lobbyists - Senate Bill 57, intended to require data centers to pay the transmission costs they impose rather than socializing them to residential ratepayers, was stripped of its substantive protections by the Assembly Appropriations Committee in late 2025 — after opposition from the Data Center Coalition and Silicon Valley Leadership Group. The final bill signed by Governor Newsom merely
- The cost allocation machinery is structurally designed to hide the subsidy - CAISO's own Large Load Issue Paper acknowledges that it "will not be possible in many instances to distinguish between which networked facilities were triggered by the load or by the generation." In other words, CAISO cannot cleanly separate what portion of the Golden Pacific Powerlink's cost is driven by data center load versus renewable energy integration versus general electrification demand. This ambiguity is not a bug — it is the feature that allows costs to be socialized.
- Speculative data center applications are driving overbuilding risk -The Public Advocates Office has warned that speculative data center interconnection requests — submitted by developers who may never build — are inflating the demand forecasts that CAISO uses to justify transmission investment. If a data center project in Imperial Valley fails to materialize, the Powerlink still gets built, the costs are still socialized, and residential ratepayers pay for infrastructure that primarily served the planning department of a tech company that changed its mind.
What the Little Hoover Commission Found
California's independent bipartisan oversight body, the Little Hoover Commission, released a 46-page report on data centers and electricity policy in February 2026 — directly contemporaneous with the Golden Pacific Powerlink's public launch. Its findings are a direct challenge to the planning framework that produced this project.
The Commission documented that utilities earn profits primarily on infrastructure investments — towers, wires, and transformers — not on electricity itself. This creates a structural incentive for utilities to build: every dollar of capital investment in a transmission line becomes rate-base earning a regulated return. Commission Chair Pedro Nava was explicit: "Where the utility makes its money is in building the infrastructure. If AI facilities require new transmission lines or substations, those costs should not be socialized across residential customers. That should be paid for by the business that receives the benefit."
The Commission recommended over a dozen reforms, including requiring confidential facility-level electricity-use reporting from data centers so regulators can track actual demand, implementing cost-allocation rules that make data center developers — not general ratepayers — responsible for infrastructure triggered by their load, and creating exit fees and collateral requirements to guard against stranded asset risk.
Assemblymember Cottie Petrie Norris, chair of the Assembly's energy and utilities committee, stated that her chamber was "moving expeditiously to pass a package of bills that will protect Californians from any rate increases and ensure that data centers pay their fair share." As of May 2026, no such legislation has been enacted with teeth.
California Senate Bill 57 (Padilla), signed by Governor Newsom in 2025, authorizes — but does not require — the CPUC to assess data center cost shifts to ratepayers. A full cost-allocation assessment is due by January 2027. No legislation currently on the books requires data centers in Imperial Valley to pay for transmission infrastructure their load demands. This means the Golden Pacific Powerlink, if built as planned under existing FERC socialization rules, would allocate data center transmission costs to all CAISO ratepayers regardless of how much AI computing load uses the line.
SDG&E's Denial: Accurate But Incomplete
When SDG&E's Bernardet Buckwitz told the May open house that the project is "not to supply power to any specific data centers or industry in general," she was accurately describing how CAISO transmission planning works: the line is authorized as a general-purpose network upgrade, not as a dedicated data center feed. That is technically correct.
But it sidesteps several harder questions that the available evidence raises:
Has CAISO updated its demand model for the Imperial Valley since the 2022–23 plan? The CEC's own January 2025 demand forecast is materially higher than the inputs used in the 2022–23 plan, largely because of data centers. CAISO's 2025–26 plan now incorporates these revised figures — but that plan is authorizing $7 billion in additional infrastructure beyond the Powerlink.
Did CAISO model the Imperial Valley data center load when studying the Powerlink? Neither CAISO nor SDG&E has publicly released a breakdown of what specific load growth scenarios drove the Imperial Valley–to–North SONGS need identification. The 2022–23 plan is a publicly available document, but the detailed model inputs for the Southern California sensitivity study that identified the need for this specific project are not separately published.
Who bears the cost if Imperial Valley data centers connect to the Powerlink? Under current rules, the answer is: every CAISO ratepayer, including residential customers in San Diego who are already paying the highest electricity rates in the continental United States.
One of the biggest things that ends up happening with these types of projects is that areas like Imperial Valley are being looked at and treated as sacrifice zones for the betterment of the whole state.
The Stanford Analysis: A Different Path
A November 2025 presentation to the Little Hoover Commission by Dr. Leong Min of Stanford's Bits and Watts Initiative offered a perspective worth noting. Dr. Min's preliminary analysis found substantial underutilized capacity on much of the Western transmission network during summer peak hours, arguing that targeted "hotspot" upgrades and better grid utilization could bring capacity online faster and cheaper than building multiple new long-lead 500 kV transmission lines.
This aligns with the argument made by critics of the Golden Pacific Powerlink — that reconductoring existing lines with advanced high-temperature, low-sag (HTLS) conductors could expand capacity by 50–100% without the environmental footprint of a new 145-mile corridor. If data center load growth is the dominant driver of additional Southern California transmission need, the question becomes whether that load should trigger a new transmission line subsidized by all ratepayers, or whether data centers should be required to finance their own dedicated interconnection — as PG&E's proposed Rule 30 would have required, before being substantially diluted.
Duke University research adds another dimension: a 2025 study found that if large loads — especially data centers — could participate in demand response, operating flexibly rather than at constant maximum load, it could unlock more than 100 GW of extra grid capacity nationwide without new transmission infrastructure. No current California regulatory mechanism requires data center demand flexibility as a condition of grid interconnection.
What Happens to San Diego Ratepayers
The convergence of trends creates a compounding risk for SDG&E customers specifically:
Scenario A — Data centers build in Imperial Valley and use the Powerlink: SDG&E customers bear their 9% share of a $1.3–2.3 billion transmission line whose primary new load is AI hyperscale computing. The data centers pay interconnection costs (potentially limited by current rules) but do not pay for the backbone transmission they benefit from. Residential bills rise to fund infrastructure that primarily serves tech companies.
Scenario B — Data centers build in Imperial Valley but don't use the Powerlink directly: The data center load pressure still drives up statewide generation procurement costs, squeezes renewable interconnection queues, and triggers additional transmission upgrades — all of which are socialized. The CAISO's $7 billion 2025–26 plan is one expression of this dynamic already in motion.
Scenario C — Data center projects fail or scale back: The Powerlink is built, the load doesn't materialize at projected levels, and ratepayers hold the stranded asset. This is the scenario the Little Hoover Commission explicitly warned against, and it is the scenario for which California has the least legal protection after SB 57 was gutted.
In none of these scenarios are SDG&E residential ratepayers — already paying 45.7¢/kWh — clearly better off as a result of AI data center growth in the Imperial Valley.
Is the Golden Pacific Powerlink a data center project in disguise? Not technically — and SDG&E is accurate when it says the line was authorized before the current data center boom, under a planning process that did not model Imperial Valley AI computing loads. The CAISO 2022–23 plan has legitimate grid reliability and renewable integration foundations that predate the data center surge.
But that is not the right question. The right questions are: Will data centers in Imperial Valley be the dominant beneficiaries of increased transmission capacity at the project's origin point? The evidence strongly suggests yes. Will those data centers pay for the transmission infrastructure their load creates? Under current rules, no — California's ratepayers will. Does the regulatory process that authorized this project adequately account for how dramatically AI data center demand has changed the load projections since 2023? The CEC's own upward-revised forecasts say no.
For San Diego ratepayers — already the most expensive electricity market in the continental United States — the data center question is not abstract. It is the difference between a transmission project that serves their energy future and one that subsidizes trillion-dollar technology companies at their expense. California's watchdog institutions are raising exactly these alarms. The legislature responded by authorizing a study. The CPUC proceeding that will decide whether the Golden Pacific Powerlink is built is the next — and most important — venue where this question can be formally contested.
The comment period is open through early November 2026. The CPUC CPCN application is expected before year-end. Formal intervenors in that proceeding can demand that CAISO and SDG&E produce the load modeling detail that has not been made public — and can challenge whether the cost socialization structure for this project adequately protects residential ratepayers from subsidizing AI infrastructure.
Sources
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Official — CAISO
California Independent System Operator. (January 30, 2026). Large Load Considerations Issue Paper.
https://www.caiso.com/documents/issue-paper-large-load-consideration-jan-20-2026.pdf -
Official — CAISO
California Independent System Operator. (April 7, 2026). "Draft transmission plan now available; recommends 38 infrastructure upgrades." CAISO News Release.
https://www.caiso.com/about/news/ -
Official — CAISO
California Independent System Operator. (2026). "Large Loads" information page. [CEC forecast data: 1.8 GW by 2030, 4.9 GW by 2040 data center load growth.] CAISO.com.
https://www.caiso.com/generation-transmission/load/large-load -
Official — Little Hoover Commission
Little Hoover Commission. (February 25, 2026). Data Centers and California Electricity Policy. [Full report, 46 pp.] lhc.ca.gov.
https://lhc.ca.gov/wp-content/uploads/Commissioner-Information-2-25-26.pdf -
Official — CPUC Public Advocates Office
Hieta, K. & Rodriguez, E. (October 28, 2025). "How Will Data Center Growth Impact California Ratepayers?" CPUC Public Advocates Office Commentary.
https://www.publicadvocates.cpuc.ca.gov/press-room/commentary/251027-how-will-data-center-growth-impact-california-ratepayers -
Investigative — KPBS
Suzuki, K. (January 21, 2026). "The plan to build a massive data center in Imperial County — without environmental review." KPBS Public Media.
https://www.kpbs.org/news/environment/2026/01/21/ -
Investigative — inewsource
inewsource staff. (April 5, 2026). "California's largest data center plan rouses Imperial County." inewsource.org.
https://inewsource.org/2026/04/05/data-center-developer-imperial-county/ -
Investigative — inewsource
inewsource staff. (April 8, 2026). "AI data center plan energizes opposition in California desert." inewsource.org. [Imperial County Board of Supervisors 4-1 vote; NIMBY Imperial petition.]
https://inewsource.org/2026/04/08/california-data-center-nimby-imperial-county/ -
Investigative — CalMatters
CalMatters staff. (March 5, 2026). "Who will pay for AI's power? New report targets California data centers." [Little Hoover Commission report release; Pedro Nava quotes.] CalMatters.org.
https://calmatters.org/environment/2026/03/little-hoover-data-center-electricity/ -
Legislative — CalMatters
CalMatters staff. (September 25, 2025). "It proved hard to shield California electricity rates from data centers." [SB 57 gutting; TURN quote on lobbyists.] CalMatters.org.
https://calmatters.org/environment/2025/09/data-centers-california-electricity-rates/ -
Legislative — Latitude Media
Giacobone, B. (October 15, 2025). "State lawmakers stand between ratepayers and data center costs." [SB 57; national legislative tracker; Edison Electric Institute capital expenditure data.] Latitude Media.
https://www.latitudemedia.com/news/state-lawmakers-stand-between-ratepayers-and-data-center-costs/ -
Policy Analysis — Latitude Media
Latitude Media. (October 1, 2025). "Interconnection reform and load growth: CAISO's paradigm shift." [CAISO CEO interview; Duke University 100 GW flexibility study; interconnection queue wait times.] Latitude Media.
https://www.latitudemedia.com/news/interconnection-reform-and-load-growth-caisos-paradigm-shift/ -
Analysis — Zero Emission Grid
Zero Emission Grid. (February 13, 2026). "CAISO Large Load Interconnection: Planning and Requirements." [CAISO Large Load session summary, Feb. 5, 2026; 4.5 GW data center demand under study.] zeroemissiongrid.com.
https://www.zeroemissiongrid.com/iso-rto-meeting-summaries/caiso-large-load/ -
News — East County Magazine
East County Magazine. (April 27, 2026). "New high voltage Golden Pacific Powerlink proposed in East County: SDG&E hosts virtual meetings May 12 and 14." [Includes Erica Martin Q&A on data center question: "There's no particular source that's driving the need for this project."]
https://eastcountymagazine.org/new-high-voltage-golden-pacific-powerlink-proposed-in-east-county-sdge-hosts-virtual-meetings-may-12-and-14/ -
News — The Cooldown
The Cooldown staff. (May 2026). "'Not in my backyard': California to surpass 300 data centers despite local opposition." [288 operating data centers as of May 10, 2026; CEC forecasts; resident quotes.] thecooldown.com.
https://www.thecooldown.com/green-business/data-center-imperial-california-debate/ -
Investigative — Data Center Dynamics / DCD
Data Center Dynamics. (May 2026). "PG&E announces $73bn grid infrastructure upgrade plan to meet surging data center demand." [CAISO peak demand: 46.1 GW in 2025, forecast 52.94 GW by 2030 without speculative AI loads; PG&E data center interconnection data.] datacenterdynamics.com.
https://www.datacenterdynamics.com/en/news/ -
Analysis — Independent.com
Santa Barbara Independent. (February 27, 2026). "The Cloud Has a Power Bill — and State Officials Say Ratepayers Shouldn't Foot It." [Little Hoover Commission hearing; Pedro Nava interview; Senate Bill 57 analysis.] independent.com.
https://www.independent.com/2026/02/27/
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