REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Authorizing the City Manager to Execute the United States Department of Energy Western Area Power Administration Sierra Nevada Region Contract for Electric Service Base Resource Contract 20-SNR-02364 for Calendar Years 2025 through 2054
Report
COUNCIL PILLAR
Promote Sustainability and Environmental Protection
BACKGROUND
The City of Santa Clara and its Electric Department, Silicon Valley Power (SVP) purchases power generated at federally owned facilities that make up the Central Valley Project (CVP Base Resource) through a contract with the United States Department of Energy's power market administrator, Western Area Power Administration (WAPA). The current Base Resource contract, which began in 2005, is scheduled to expire on December 31, 2024. In 2017, WAPA initiated a process for replacing the expiring contract. Over the last 3 years, WAPA and its customers, including SVP have been working towards the replacement contract covering the period January 1, 2025 through December 31, 2054. On September 16, 2020, WAPA sent out the final version of the replacement contract. It is substantially similar to the existing contract, with some notable changes discussed below.
The CVP Base Resource, during an average hydrological year, provides approximately 10% of the City's annual retail electricity sales. This energy comes from 100% carbon-free energy resources and helps maintain SVP's low carbon intensity of its energy supply portfolio.
DISCUSSION
The federal Department of Energy's power market administrator has completed all negotiations with the customer group that it intends to make on this agreement. All customers are signing the same form of the agreement. SVP's choice now is to approve the agreement as it is written now or to not sign the agreement. If SVP chooses not to sign, then SVP's portion of the hydro-electric resources will be allocated to other eligible customers in 2025 and SVP will not have rights ...
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