Fifty years ago this year, Santa Clara won a crucial battle to cut residents’ electric bills and ensure the city’s control of its own electric power destiny. City officials persuaded then-Secretary of the Interior Stewart Udall to order that Santa Clara receive 75 megawatts of from the federal Bureau of Reclamation’s Central Valley Project (CVP) hydroelectric power plant, slated to come online later that year.
As a municipally owed utility, the city should have been a “preferred customer” for the cheaper hydropower from the CVP. But Santa Clara’s claims were blocked by PG&E, says former Mayor Larry Fargher, who was on the City Council at the time. Santa Clara had put in its application to the Bureau of Reclamation for a share of the CVP output four years earlier, but because the power would be delivered over PG&E’s lines, the city could be excluded from the Bureau of Reclamation’s definition of a “preferred customer.”
At the time the city was paying PG&E $2.5 million annually for power under a contract that ran until 1967, according to a July 22, 1964 San Jose Mercury report. The CVP power had the potential to save Santa Clara $1 million in electric costs.
At the same time, a congressional “battle” was brewing over the terms of an agreement to link public and private power distribution in western states. In July, then City Manager Don Von Raesfeld got a heads up from the American Public Power Association that Santa Clara’s share of CVP power could fall victim to negotiations between private power companies and federal officials.
That night, Von Raesfeld and City Electric Superintendent Gordon Hoyt were on a redeye flight to Washington D.C. to lobby for the city’s interests. The next day, federal officials from President Lyndon Johnson to congressmen got an avalanche of telegrams from city residents and elected officials asking for an investigation.
That lobbying paid off. Udall sent a directive to the Bureau that Santa Clara was to receive the 75 megawatts it was asking for as soon as “PG&E agrees to make appropriate changes in its contract to supply the city with electricity,” wrote the July 29, 1964 Santa Clara Journal.
The city “flipped the switch” on CVP at 12:01 a.m. Wednesday, Dec. 1, 1965. “City Manager Don Von Raesfeld spent a full day Tuesday wrapping up details of the Bureau of Reclamation power sale contract,” wrote the Journal that morning, “capping it by flying to Sacramento at 4:30 p.m. and then returning with the signed papers in time for last night’s City Council meeting.”
Although the Council wasn’t ready to announce a rate cut, the Journal noted that when Palo Alto went online with federal hydropower, electric bills there dropped 15 percent.
But there’s no question, according to Von Raesfeld, that Central Valley power was ” the catalyst for Santa Clara’s aggressive search for [power] generation and independence, and the foundation for continued success of public power in Santa Clara.”