The Big Picture
The City of San José has approved a long-term franchise agreement with LS Power to build major new transmission infrastructure across the city.
The projects will deliver roughly 2,000 megawatts of new capacity, including new underground and overhead lines connecting key substations across the South Bay. Construction is expected to begin in 2026 and run through 2028, with the goal of strengthening grid reliability, supporting electrification and enabling future economic growth.
Why it Matters
This is about more than infrastructure. It’s about economic positioning.
San José is making a deliberate move to ensure it has the power capacity needed to compete for the next generation of industries, particularly AI, advanced manufacturing and data centers, all of which require massive and reliable energy supply.
At the same time, the agreement highlights a shift in how cities think about infrastructure. Power is no longer just a utility issue. It’s a core economic development strategy, tied directly to job growth, competitiveness and long-term fiscal health.
And there’s a second layer: revenue. The deal includes ongoing franchise payments into the General Fund, turning infrastructure into a recurring funding source for city services.