REPORT TO COUNCIL
SUBJECT
Title
Action to Waive Second Reading and Adopt Ordinance No. 2087 granting a non-exclusive franchise to LS Power Grid California, LLC on terms and conditions set forth in the ordinance for the Power the South Bay and Power the Valley Connector Projects for the purpose of transmitting electric service in the City’s public rights-of-way
Report
BACKGROUND
At the July 7, 2026 Council meeting, proposed Ordinance No. 2087 was passed for the purpose of publication. Pursuant to City Charter Sections 808 and 812, a summary of proposed Ordinance No. 2087 was published to the Santa Clara Weekly on July 8, 2026, and copies were posted in three public places.
DISCUSSION
The proposed ordinance would authorize and grant LS Power Grid California, LLC (“LS Power”), and its successors and assigns, a franchise to install, construct, maintain, and operate underground electric transmission facilities within designated public rights-of-way in the City of Santa Clara.
The proposed franchise term is ten (10) years, with automatic renewals for successive ten-year terms, not to exceed a total term of forty (40) years, unless otherwise terminated in accordance with the franchise agreement and applicable law.
LS Power, and its successors and assigns, shall, during the life of the franchise, pay to the City an annual franchise fee equal to two-point-three percent (2.3%) of the gross revenue derived from operations within the City of Santa Clara, as specified in the franchise application and proposed franchise agreement. In the event such payment is not made, the franchise shall be subject to forfeiture as provided by law.
In addition to other terms and conditions, LS Power will also indemnify the City, post faithful performance security, and will provide adequate insurance throughout the duration of the franchise.
ENVIRONMENTAL REVIEW
The California Public Utilities Commission (CPUC) is the lead agency for the Power the South Bay Project. The CPUC prepared a Final Environmental Impact Report (FEIR) for the Project in accordance with the California Environmental Quality Act. The CPUC granted LS Power Grid California a Certificate of Public Convenience and Necessity (CPCN) and certified the FEIR on March 19, 2026.
The FEIR and Mitigation Monitoring, Compliance, and Reporting Program (MMCRP) are posted on the CPUC’s website at https://ia.cpuc.ca.gov/environment/info/esa/psb/index.html (A copy may be acquired through the City Clerk’s Office).
FISCAL IMPACT
LS Power Grid California will pay the City an annual fee of 2.3% of the Santa Clara portion of its gross revenue on an annual basis, with the first year franchise payment expected to be approximately $175,000. The proposed 2.3% franchise fee was negotiated by the parties, is consistent with the rates charged by San Jose and Fremont, and reflects the fair and reasonable value of the franchise rights being granted.
There is no additional cost to the City, as LS Power will reimburse the City for staff time and expenses necessary to develop, approve, administer, implement, and enforce the franchise.
COORDINATION
This report has been coordinated with the City Manager’s Office, City Attorney’s Office, and the City Clerk’s Office.
PUBLIC CONTACT
A summary of proposed Ordinance No. 2087 was published to the Santa Clara Weekly on July 8, 2026, and copies were posted in three public places and made available for public inspection at the City Clerk’s Office.
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Waive Second Reading and Adopt Ordinance No. 2087 granting a non-exclusive franchise to LS Power Grid California, LLC on terms and conditions set forth in the ordinance for the Power the South Bay and Power the Valley Connector Projects for the purpose of transmitting electric service in the City’s public rights-of-way.
Staff
Reviewed by: Nora Pimentel, Assistant City Clerk
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Ordinance No. 2087 (Intro)