REPORT TO COUNCIL
SUBJECT
Title
Action on Authorizing the City Manager to Negotiate and Execute the Transmission Owner Rate Case Program Agreement with the Northern California Power Agency to Provide Support Services in Transmission Owner Rate Cases on behalf of Silicon Valley Power
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara's electric utility, Silicon Valley Power (SVP), is connected to the California Independent System Operator (CAISO) grid. In California, while the flow of energy on the transmission grid is controlled by the CAISO, three investor-owned utilities (IOUs) own a majority of the transmission grid: Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E). Transmission owners, like PG&E, SCE, and SDG&E, are required to develop and file Transmission Owner Tariffs (TO Tariff), which describe the terms and conditions for wholesale customers to access the transmission system at the Federal Energy Regulatory Commission (FERC). In addition, transmission owners are required to file a Transmission Revenue Requirement (TRR) at the FERC demonstrating the transmission owner is providing transmission services at just and reasonable rates. The TRR is the total cost of construction, maintenance, and operation of the transmission system, including the return on investment and depreciation. The TO Tariff and TRR must be approved by the FERC. The collective TRRs from participating transmission owners in the CAISO region sets the CAISO Transmission Access Charge (TAC), which is charged to load-serving entities such as SVP.
SVP, along with other CAISO stakeholders, can intervene as a party in the FERC transmission owner's rate cases to ensure the TRR filed by the transmission owner is just and reasonable. These rate cases typically require significant amounts of time and involve legal representation, forensic accountants to revi...
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