REPORT TO COUNCIL
SUBJECT
Title
Approve a Silicon Valley Power One-Time Climate Credit for Small Commercial (C-1) Customers
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
On May 23, 2023 (Council Report 23-479), the City Council authorized a 5% mid-year increase to the electric rate schedules of Silicon Valley Power (SVP) for all classes of customers, effective July 1, 2023. This proposed increase was necessary due to the spike in market energy prices and market natural gas prices which mostly occurred in December 2022 and January 2023. This spike in natural gas prices caused unforeseeable and significant increases in SVP's power purchase and production costs.
As discussed at the May 23 Council meeting, as part of the rate increase staff will also be implementing a one-time efficiency/climate residential credit of $30 that is intended to help cover the increased costs for all residential customers. The credit is funded from existing Green House Gas reduction funds which are derived from the sale of allowances under the Cap-and-Trade Program. A number of utilities, including PG&E, provided similar credits. These credits are not typical for SVP, and the only similar credit SVP has implemented was to provide customer relief during the Covid-19 pandemic.
During its consideration of the mid-year rate increase, the City Council suggested staff develop a similar small commercial (C-1 billing rate) credit.
DISCUSSION
Even with the approved increase, SVP's rates will remain significantly below PG&E's current rates (and lower than any other utility with more than 10,000 customers). For the small commercial customers (C-1 rate), SVP rates are 35% lower than PG&E. For a typical small business (1000 kWh) the proposed increase is approximately $11.00 a month for a new total of $228.88.
In comparison, for a large commercial/industrial customer, the typical increase will be an additional $3,912 a month and...
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