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California leaders push energy grid upgrades as AI drives power demand

By James Taylor, CBS13 Photojournalist

/ CBS Sacramento

Frustration over rising power bills is a common complaint in California, and the state is bracing for increases in power consumption as the use of artificial intelligence grows.

Lawmakers, researchers, and green energy advocates met in Sacramento on Tuesday to prepare California's power grid for more demand without huge price spikes.

"We need to become more efficient to meet that growth, otherwise we're just going to keep building more infrastructure and everyone's bills are going to go up," said Arnab Pal, executive director of Deploy Action.

One way to meet future energy needs is by storing solar and wind power in individual homes and businesses using batteries, which is becoming increasingly more cost-effective.

"Five years ago, it probably would have cost you $15,000 to put them in," said Jigar Shah, board chair of Deploy Action. "Today, it's less than $5,000. Why? Because stuff has gotten cheaper. The technology is better."

Another energy efficiency idea is to create what's called "virtual power plants." The concept uses a network of smart home appliances, electric vehicles, and battery storage to stabilize energy usage throughout the day. It helps avoid peak loads that lead to higher energy costs.

The idea is already being used by the California Independent System Operator, which manages the state's power grid, to generate up to several hundred megawatts. Supporters say it's a lot less expensive than building new power plants.

"It actually reduces the rates for everyone who's on the grid because we can get more out of what we've already paid for," Shah said.

The growth of artificial intelligence and data storage is creating more demand for power in California. The goal is to meet those future needs without using more fossil fuels and avoiding rolling blackouts.

"When we're going through this clean energy transition, we want safety, we want reliability, we want affordability," said Ben Jamin Finkelor, executive director of the UC Davis Energy and Efficiency Institute.

State lawmakers are considering several bills to improve California's power storage capabilities and provide financial incentives to utilities for modernization efforts.

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