REPORT TO COUNCIL
SUBJECT
Title
Action on Resolution Amending Rate Schedules for Electric Service for All Classes of Customers, Effective February 1, 2021
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 proposing a rate increase of 3% for all classes of customers, effective February 1, 2021 (Bill Cycle 704). SVP's budget for the 2020/2021 fiscal year assumed a 3% rate increase effective January 2021. The budget, with this assumption, was approved by the City Council on June 23, 2020.
Electric Utility staff have reached out to the Energy Task Force (large customers), school districts, numerous individual customers, and media representatives. Staff also has provided information via social media: Nextdoor, Twitter and Facebook. The rate increase notice will be published in the Outlet Newsletter that is mailed to all commercial customers.
DISCUSSION
The proposed 3% rate increase is needed to cover the increased cost of generating and delivering power to SVP customers including:
* Transmission access charges that apply to all electric energy that SVP receives via the PG&E transmission system. PG&E's electric transmission rate has tripled over the past 10 years and more stringent wildfire safety requirements and insurance costs are expected to continue to add to the rise in these charges.
* Additional renewable energy, reliability, and safety requirements that have been legislated.
* Continuing upgrades and maintenance of infrastructure required to maintain SVP's high service reliability.
* Low interest rates that have eroded interest income from SVP's cash reserves and the need to maintain SVP's cash reserve funds in order to maintain SVP's current A+/AA- bond ratings.
As noted above, one of the main purposes of the rate increase is to maintain SVP's infrastructure and overall system. The rate increase will add approximate...
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