REPORT TO COUNCIL
SUBJECT
Title
Public Hearing: Action on Adoption of a Resolution Amending Rate Schedules for Electric Services for All Classes of Customers to Increase Electric Rates and Charges in Each Rate Schedule by 4.0% and Make Other Modifications, Effective January 1, 2026
Report
BACKGROUND
Like other electric utilities in California, the City of Santa Clara's Electric Utility, Silicon Valley Power (SVP), evaluates the need for rate increases in the context of ensuring reliable low-cost service to the community. Many utilities in California are seeing operating pressures driven by the need to replace aging infrastructure, increasing risks such as wildfires, increasing regulatory mandates, and other unanticipated challenges. SVP is no different and is also experiencing unprecedented load growth, having already seen the highest growth among publicly owned electric utilities in California. This growth is a significant source of new revenue that helps offset some of the other costs, but it also is a driver for SVP's large capital program.
The proposed 4% increase takes into account the revenue needed to continue to operate and meet the needs of SVP's customers, and is in line with historic rate increases as detailed below:
Table 1: 5-year rate increase history
Year
Rate increase
Drivers
2021
3%
Routine Cost Drivers as described in RTC
2022
3%
Routine Cost Drivers as described in RTC
2023
January 1
8%
Natural Gas Crisis, Increased
July 1
5%
Cost of Materials,
2024
10%
Natural Gas Crisis, Increased Cost of Materials
2025
5%
Routine Cost Drivers
2026
4%
Proposed/Drivers discussed below
Overall, SVP is in a strong financial position with projections showing increased revenue growth and reserves increasing steadily over time.
DISCUSSION
The proposed 4% rate increase is needed to cover the cost of generating and delivering power to all SVP customers and to help ensure the long-term reliability and stabilit...
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