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Milestones – This Will Blow Your Fuse! – Opinion

Investigative reporter Erika Towne has turned the spotlight on Silicon Valley Power. What has been suspected, and has now been revealed, SVP has turned its autonomy into a power-hungry fiefdom.

At a recent City Council meeting, SVP made it known that they would be requesting another rate increase. This would be the third increase within a year.

Hold it folks. Somewhere in this relationship between City Council, residents and the city’s power company, they got their wires crossed.

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SVP was a brilliant idea. Create a Santa Clara owned power company and make rates lower and more affordable for residents and at the same time, attract new business.

This idea has worked well for over 100 years, beginning in 1896.

It has not been easy. Keeping the greedy power companies from squeezing SVP into a forced sale while meeting all the requirements of the Feds and state regulators is tough.

PG&E views SVP as a thorn in their butt that sits in the middle of Silicon Valley. Residents have been the recipients of power rates up to 40% less than PG&E right next door. These competitive rates have been extended to businesses as well.

However, SVP and its independent board, along with current Manager Manuel Pineda, have lost their focus and now have their wires crossed.

SVP is selling power below market rates to data centers and asking residents to make up the difference. That amounts to a public subsidy for businesses worth billions.

Now, isn’t that convenient?

Sorry Mr. Pineda, it doesn’t work that way.

You have misplaced the vision that made SVP so great for generations. It is not the responsibility of residents to make up the difference for generosity to data centers.

If you and your salesmen can’t sell rates that are already exceptionally competitive, Santa Clara has the wrong salesmen or manager.

The way this has worked for generations is the horse goes in front of the cart.

The residents of Santa Clara are not the piggy bank for SVP. Anyone can sell anything if someone else pays the bill.

The council should either send you back to the calculator or, failing that, go on a national search for a sales team that doesn’t believe they have to give their competitive product away at the expense of their current customers.

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8 Comments
  1. Erikagotit Wronge 8 months ago
    Reply

    Investigative Reporter Erika Towne clearly got some things wrong!!

    SVP is the Electric Department of Santa Clara and does not have an Independent Board! SVP sells power below market rates to all its’ customers…not just data centers. Imagine that…. We pay pennies compared to the residents in our neighboring cities. Are you suggesting that all customers pay market rates? i hope not…

    City Council keeps approving the Data Center agreements and I agree that someone should pause this…Like our money grubbing 49er 5 City Council!!! But the more data centers that come in, the more tax revenue is generated for the general fund and little Tommy gets to enjoy watching more fire stations being built…

    Erika maybe focus on real issues instead of making crap up…

  2. Buchser Alum 8 months ago
    Reply

    I am wondering why Miles is so eager to attack our SVP electrical utility.
    .
    Every customer of SVP pays “below market rate” for electricity if “market rate” are the rates that PG&E charges to people right next door to us.
    .
    Business customers of SVP that use higher amounts of power pay lower rates than residential customers. The same type of volume discount is given to business customers of PG&E compared to residential customers. And the utilities make a profit on sales of electricity to all customers including the big business customers.
    .
    In almost all industries there are volume discounts reflecting the lower cost of delivering single units of a good or commodity to a customer who purchases in high volume. It costs far less for SVP to deliver a kilowatt hour of electricity to a big power user than it does for them to deliver the same unit of power to a small residential user.
    .
    This is why residential customers pay a higher rate for power than big industrial and commercial users. No matter where you go in the country.
    .
    SVP is one of the unique prides and joys of Santa Clara. It has been incredibly well managed as witnessed by the continued low rates we enjoy and high service uptime with quick resolution of problems like we saw in last year’s huge wind storms.
    .
    Shame on you Miles for attacking them whether your attack is being made due to your ignorance or some political motivation.

  3. H Tonking 8 months ago
    Reply

    Basic a critical thinking question based on public information on SVP website: how could residents who pay for less than 6% of all kWh used at a rate that 58% below PG&E residential rates be “subsidizing” the big industrial customers that pay for 90% of the kWh usage at a rate only 45% below PG&E rates? To anyone with a mathematical mind that would obviously be impossible for the 6% to make up for the 90% — without residential rates being multiples higher than PG&E in all hours to create any realistic subsidy. It’s almost like Erika went through some crazy twisted analysis, rather than just ask a few straight questions, to just to come up with the wrong conclusion based on false assumptions and bad interpretations. Perhaps SVV should stick to writing (fiction) instead of trying to be an investigative data analyst. Did Erika actually talked to a single customer currently on time of use rates about how those rates work for them in reality (not her “math”)? since that seems the basis of her embarrassingly bad theory. How much does she or Miles pay on her own bill?

    • Buchser Alum 8 months ago
      Reply

      H Tonking,
      .
      It is almost as if they are ignorant about their own ignorance.
      .
      But it more like they have some kind of political agenda in trying to make SVP look bad.
      .
      You are right on the math but the even simpler math is whether or not SVP makes a profit on selling electricity to the big industrial customers. If they are making a profit then nobody is subsidizing those sales period. It is either ignorant or deceitful to not get this basic understanding correct in a so called investigative report.
      .
      In fact due to the volume of their use and purchases it is most likely that the big industrial customers end up paying for most of the big infrastructure improvements that SVP makes and scaling up SVP to be as big of a utility as it is which results in more manpower and resources to keep our residential service reliable and cheap.
      .
      Whenever I have watched Manuel Pineda giving reports on SVP business he seems to be very smart and capable. It does not appear that Erika or Miles has even asked him for an interview so that he can educate them on SVP’s business and how it is equitably serving the residents and businesses of Santa Clara.

  4. Ve Ga 8 months ago
    Reply

    This is an opinion based on Erika’s report published in this magazine a week or two ago. Instead of obfuscating the price issue by comparing with PG&E, which is a completely different kind of company (a for profit org which is responsible to it’s shareholders), go through the rate comparison and other details in the original investigative report.

    These are genuine questions.

    1. What is the purpose of SVP? Is it to benefit the actual Santa Clara residents or to benefit large corporations that pay minimal taxes (in this case, only a property tax). Council needs to answer this first.

    2. Arguments about volume discounts is suspect. Volume consumption needs infrastructure upgrades, which cost a lot of money. Is our current infrastructure designed to handle large data center consumption without any upgrades? Is it wrong then to ask the DCs to pay for it?

    3. We do need large business presence in our city. Usually, businesses that employ people (even better, that have headquarters in our city like Intel) provide better returns. They pay taxes for the employees, sponsor corporate events that benefit our schools and other civic facilities, and generally try to contribute to the city. The employees support local small businesses like restaurants. Conversely, the employees put pressure on the road infrastructure so they come with a cost. We need to decide what we want, a large area of (almost) people free industries that make no contribution to our city or a large area that is populated by the employees that makes the area more lively, with local small businesses and support for local events and facilities. This is definitely not in the scope of SVP but a decision to be made by the City leadership.
    4. Finally, an observation. Our city politics are now dominated by Pro and Anti 49ers groups, clearly seen in the council meetings. I was a Anti 49ers to city (voted against the measure a decade ago) but now I don’t care. We voted for it and we need to move on. I don’t like mixing every valid question with 49ers. How exactly are 49ers relevant to asking SVP and the Council about their vision and policy regarding large DCs?

    • Buchser Alum 8 months ago
      Reply

      Ve Ga,
      .
      1. SVP is for the benefit of the people of Santa Clara and it does benefit us all. They deliver much cheaper rates and reliability that PG&E does not. The fact that they also serve large industrial users of electricity does not take away from their benefit to the residents of Santa Clara. It in fact benefits us all.
      .
      2. Infrastructure investments by SVP benefit us all. The much huger capacity of SVP means that our relatively small percentage of residential usage is even more secure and reliable than it would be if SVP was scaled to mostly provide power to residences. It is also investment in providing high volume electricity at a profit for decades. High volume customers means high volume revenue and 5% of SVP revenue. That currently equals out to around 30,000,000 dollars. Do you know how much of that is due to sales to high volume industrial users? I have also heard that datacenters have to pay directly for a lot of infrastructure that their usage requires adding.
      .
      3. Having more datacenters does not prevent us from having more high employment businesses. It is not like land that is used for datacenters is going to be used to build offices. We have too much office space that is not being used in this new world of working from home and we are unlikely to need more office for many years even decades.
      .
      4. I agree and do not see any connection between issues concerning the Forty Niners or the stadium having any relation to questions people have about SVP operations.
      .
      I am no expert in utilities or SVP but I have watched many of Manuel Pineda’s presentations on SVP to the city council and I find him to be very impressive. He seems to be running a tight ship at SVP and reporting about operations at a fine detail publicly to the council. I do not see any reason to assume that anything is being done against the public interest. I think if there are questions that we should investigate those questions but what Erika and Miles have done is drum up doubt and blame without showing any reason to doubt and blame SVP. They do not seem to have much knowledge about SVP operations or how to even analyze how well or how poorly SVP is serving the residents of Santa Clara versus the businesses of Santa Clara.
      .
      Miles’s statement that residents of Santa Clara are subsidizing electrical sales to businesses is either ignorant or is dishonest muckraking. They are selling this electricity at a profit and the high volume of these sales pumps millions of dollars into our general fund.
      .
      We all enjoy cheap electricity that is super reliable. The good people of SVP make sure we enjoy this with their hard work. Often times during the high stress situations of storms and working throughout the night to restore power.
      .
      It is disgraceful that Miles is attacking SVP without showing that he has any reason to attack them or even has the understanding of what they do to form a reason.

  5. H Tonking 8 months ago
    Reply

    Ve — the obvious answer to “what is SVP purpose” is to provide reliable electricity to *all* accounts in its territory (just like PG&E, so legitimate comparison) but as a not-for-profit. If you want to get super technical, SVP was created to just provide streetlights for Santa Clara. LOL! Not sure why volume discounts would be suspect, but what is factual is that wholesale electricity does actually cost different amounts at different times. Given that is an actual FACT (versus Mile’s random conjectures), if the big business use a lot of electricity in those cheap hours (all night long people) than they will have an average lower cost across all their huge usage. Whereas a resident who greatest usage is in the most expensive evening hours, the cost to SVP is going to be higher on average and then the added fixed costs to meter/maintain/bill for a small usage it will drive up the levelized cost across each unit. Most of the houses around here were built in the 60s — the infrastructure in those backyards is coming to end of life and those upgrades and replacements are going to cost a lot of money. How much to you pay on average for your time of use rates?

  6. H Tonking 8 months ago
    Reply

    VE — btw, agree with you are point #3 and #4. But that isn’t up to SVP so not sure why folks are harping on SVP.

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