REPORT TO COUNCIL
SUBJECT
Title
Public Hearing: Action on a Resolution Amending Rate Schedules for Electric Services for All Classes of Customers, Effective January 1, 2023
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 8% for all classes of customers, effective January 1, 2023 (Bill Cycle 728). This is an additional 3% above what had previously been communicated to Council. As described in the approved CIP budget: "For the purposes of the annual budget, SVP assumed a rate increase of 3% for calendar year 2023. However, with significant rising costs, a rate increase of 5% may be needed. Any proposed rate increase will be brought to City Council for approval in the fall 2022." A number of factors (described in the Discussion Section of this report) have increased costs significantly from what staff previously anticipated, including the surge to a 40-year high Consumer Price Index - a measure of inflation - that reached 8.2% over the past 12 months ending September.
Electric Utility staff have reached out to the Energy Task Force, (large customers), school districts, numerous individual customers, City news and SVP news subscriptions by way of GovDelivery. 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 8% rate increase is needed to cover the increased cost of generating and delivering power to SVP customers. SVP's primary cost drivers are driven by inflation, natural gas prices, and electric supply and distribution costs. These costs have increased significantly more than previously expected for FY 2022/23 and beyond. For FY2022/23, over 20% of the power supply may be purchased from the California Independent System Oper...
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