REPORT TO COUNCIL
SUBJECT
Title
Action to Delegate Authority to the City Manager to Negotiate a Multi-Year Emergency Load Reduction Program
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
On May 6, 2022, the State's energy regulators and managers announced a potential energy shortfall of 1,700 MWs this summer or the equivalent of nearly 12 Donald Von Raesfeld (DVR) power plants. The State has also identified shortfalls in the summer months through at least 2025. The shortfall could grow to 4,000 to 5,000 MWs in an extreme weather and fire risk scenario. In the same week, the California Energy Commission (CEC) reached out to ask Silicon Valley Power's (SVP) assistance in facilitating enrollment of Santa Clara Customers in a potential State-designed emergency load reduction program.
Last summer, on June 22, 2021, the City Council acted to Delegate Authority to the City Manager to Adopt a Pilot Emergency Load Reduction Program and Negotiate Compensation for Program Participants. This action allowed SVP to negotiate with various State and local stakeholders to establish an Emergency Load Reduction Program (ELRP) with our customers. Under the ELRP, Customers would have been paid for their participation by the California Independent System Operator (CAISO). Current discussions are for a similar program with a similar outcome but a different payment mechanism, thus a new agreement, and is not yet named.
Given climate uncertainty, the potential extreme heat events combined with the low levels of water in hydroelectric reservoirs, supply chain issues, and delayed generation construction, California could be at risk for another potential energy shortfall this summer, like the 2020 heat waves. There were rotating outages in August and September 2020 during extreme west-wide heat storms, but rotating outages were avoided in a cooler summer of 2021. On August 16, 2020, the Governor signed a Proclamation Stat...
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