Why Grid Flexibility Is Now Essential — and How PG&E Is Delivering It

At Latitude Media’s Transition AI event on April 14 in San Francisco, one message came through loud and clear: big energy users must be flexible. It’s no longer a “nice to have.” It’s essential.

Utilities, developers, and technology leaders agreed that electricity demand is rising fast. AI, data centers, electric vehicles, and building electrification are all driving growth. Meeting that demand depends, in part, on how well the grid — and customers — can adjust in real time. PG&E didn’t just discuss this shift. We helped shape it.

What does flexibility mean for energy?

PG&E sees that today’s data centers are not like traditional large energy users. Many have dedicated energy teams and advanced equipment. Some have onsite generation, batteries, and controls that let them reduce, shift, or manage electricity use.

This creates a new kind of customer: flexible, transmission-connected loads. With the right approach, these customers can connect sooner, helping meet fast-growing demand from AI and cloud computing. That can also reduce the need to build more infrastructure than necessary.

But flexibility only works when it’s coordinated. Large data centers can change their load quickly—and at huge scale. If those shifts happen without visibility or planning, they can affect voltage and frequency and increase reliability risk. Flexibility that helps one site may create new problems for the shared grid if it isn’t planned and communicated.

There are two main ways data centers can be flexible:

• Dispatchable flexibility uses tools like batteries, demand response, or operational changes that PG&E can call on when we expect grid stress. This can help in planned situations. But it can be limited during fast, unexpected events on the transmission system.
• Structural (permanent) flexibility goes further. It means investing in onsite or nearby generation resources that create ongoing headroom on the grid. This can improve resilience during outages, but only when it is carefully modeled and included in grid planning.

The takeaway is simple: data centers are not just a load challenge. They are a flexibility opportunity—when that flexibility is predictable, visible, and built into the system.

Utilities as system integrators

Utilities aren’t gatekeepers. We’re system integrators. We serve millions of customers and have to do it safely and affordably.

In many parts of California, the biggest constraint is not power generation. It’s transmission capacity. Projects do best when they plan for grid constraints from day one, engage early, and design flexibility that supports the system instead of working around it.

Flexibility can help projects move faster, lower costs, and keep rates more affordable over time. It helps PG&E use the grid more efficiently, invest where it matters most, and guide growth to places where capacity already exists.

Instead of building new infrastructure everywhere, flexibility helps us use what we already have better. That benefits everyone who pays an electric bill.

PG&E Chief Commercial Officer Chelle Izzi shared that grid readiness doesn’t start with spreadsheets. It starts with people who understand local communities.

“Grid readiness doesn’t start with megawatts,” Izzi said. “It starts with local knowledge.”

Knowing local capacity, permitting needs, land use rules, and community priorities helps PG&E and customers find solutions that are faster and more likely to earn community support. That approach is already showing results. Through education and outreach, about 80% of customer applications in PG&E's latest cluster study moved to areas with available capacity, Chelle shared. This targeted load growth helps deliver faster “speed-to-power” outcomes for PG&E's data center customers.

Flexibility in action

Izzi also shared examples of how flexibility is already helping customers move forward:

Flex Connect. PG&E’s Flexible Service Connection program (also called Flex Connect) has enabled more than a half dozen customer sites — such as EV charging stations and grid-scale batteries — to connect to PG&E’s distribution system sooner. Flex Connect uses PG&E's cloud-based Distributed Energy Resource Management System (DERMS) to coordinate a site's power demand based on when electricity supply is readily available. This solution allows a site to connect sooner, while PG&E completes necessary long-term infrastructure upgrades in the area. In many cases, it helped projects move ahead by 18–24 months. More than 50 additional sites have committed to using Flex Connect in the coming years to speed up energization timelines. 

T-Flex. Later this year, PG&E will launch T-Flex (short for “transmission flexibility”). It applies the same flexibility-based ideas behind Flex Connect to the transmission system. T-Flex would allow large, flexible loads like data centers to connect sooner by adjusting usage during rare grid constraints, instead of waiting years for upgrades.

Why this matters for rates

On a separate panel, PG&E’s Alex Portilla, director of Clean Energy Tech Platforms, explained why flexibility matters to every customer — not just large energy users.

“Flexibility isn’t just about speed to power,” Portilla said. “It’s how we invest smarter, increase system use, and keep rates down.”

As more customers connect — from EVs to data centers — PG&E can spread grid costs across more usage. Under the right conditions, adding one gigawatt of new load can reduce rates by about 1%. PG&E already supports flexibility through behind-the-meter batteries, millions of smart thermostats, and hundreds of thousands of EVs. The next step is not new technology. It’s building clear, fair and scalable ways for customers to participate.

Across the event, one theme stood out: the future grid will be built by those who plan for flexibility, partner locally and scale responsibly.