REPORT TO COUNCIL
SUBJECT
Title
Action on Resolutions of the City of Santa Clara Amending Rate Schedules for Electric Service for All Classes of Customers Effective April 1, 2019 and Authorizing the City Manager to Amend City Rate Schedules for the Electric Utility Service for changes of the State Surcharge
Report
BACKGROUND
The City Council adopted a Resolution (No.18-8620) at its regularly scheduled meeting on November 13, 2018 to amend City rate schedules for Electric Utility Service to increase Electric rates and charges in each rate schedule by two percent (2.0%) beginning January 1, 2019 (Bill Cycle 680). At its regularly scheduled meeting on November 27, 2018, the City Council adopted a Resolution (No. 18-8629) Establishing New Electric Rate Schedules for Large Customers.
The State Surcharge is a non-bypassable charge required by the Energy Resources Surcharge Law (California Revenue & Taxation Code section 40001 et seq.). In California, consumed electrical energy purchased from an electrical utility on and after January 1, 1975 is subject to the surcharge. Every electric utility in California, including Silicon Valley Power (SVP), making energy sales to consumers must collect and remit to the state the amount of surcharge applicable to its consumers.
The California Energy Commission (CEC) determines the State Surcharge Rate in each November for the next calendar year, and under no circumstances may the rate exceed $0.0003 per kWh.
DISCUSSION
In late December 2018, the City received a notice from the California Department of Tax and Fee Administration informing that the Electric Energy Surcharge Rate will increase from $0.00029 per kWh to $0.0003 per kWh, effective January 1 through December 31, 2019. The State Surcharge Rate, which might be subject to future changes in the law and is subject annually to changes as determined by the CEC, is equal to kWh consumed in each billing period times $0.0003 per kWh. SVP needs to amend all the electric rate ...
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