Santa Clara continues to ramp up its electric utility connectivity, approving two big-ticket items that lay the groundwork for its continued system expansion.

At its July 8 meeting, the Santa Clara City Council approved a revolving credit agreement and a franchising agreement. 

Nico Procos, Silicon Valley Power (SVP) CEO, said the $350 million revolving credit line, through TD Public Finance, allows the city to fund major capital improvement projects without needing to secure bonds.

SVP has been ramping up its capacity for several years, recently hitting a new peak capacity of 780 megawatts. Over the next few years, SVP employees expect that capacity to grow to 1,300 MW.

Among the efforts to increase that capacity is improving transmission stations, upgrading transmission, a battery storage program and installation of a 115 kV transmission line.

“So really there is a lot happening both within our system and external to our system to accommodate the growth,” Procos said. 

The biggest capital improvements that necessitate the financing are upgrades to receiving stations. The Northern Receiving Station upgrade will cost $148.5 million and is set for completion in June 2028. The Kifer and Scott Receiving Stations together will cost $221.2 million, with completion in March and June 2029, respectively.

Kenn Lee, the city’s finance director, told the council that the financing helps avoid large rate increases, shares the cost of improvements over generations and preserves cash reserves. Further, it allows flexibility with cash flow timing and protects the city’s AA credit rating. It will likely save the city between $2.19 million and $11.51 million over the five years. 

Council Member Kevin Park used the item as a springboard to discuss the city’s electric utility more broadly. He noted that a single data center uses as much energy as the city’s entire residential base. 

Although Santa Clara has a significantly larger budget than neighboring cities, its pillar infrastructure is still floundering, he said, with major repairs needed at the George Haines International Swim Center (ISC), the convention center, as well as the likely disappearance of California’s Great America.

“And while [other cities are] putting in place new city halls, new civic centers and putting in place downtowns and main streets and revitalizing areas that [they] have, we are losing infrastructure in the city,” Park said. “At some point, we need to look at why we are expanding the electric utility.”

Council Member Suds Jain countered, saying the expansion offsets taxes for residents, adding that it is a “huge benefit” for them.

Mayor Lisa Gillmor iterated her claim that SVP makes Santa Clara the “envy of every other city,” saying it is “one of the main reasons Santa Clara is so financially secure.” She pushed back on Park’s comments, calling them a “waste of time,” adding that the item was not about raising rates but simply “prudent.”

The item passed in a 5-1 vote with Park dissenting. 

The council also approved a franchise agreement with LS Power for two electric connector projects — Power the South Bay (PtSB) and Power the Valley (PtVC).

Both projects will install underground electric transmission lines. The PtSB will feature a 238 kV high-voltage line along Lafayette Street. The PtVC will begin at the Northern Receiving Station and go into San Jose, tentatively along Lafayette Street, Agnew Road and Montague Expressway.

The 10-year franchise agreement will bring in $175,000 a year into the city. The agreement automatically renews in 10-year increments up to 40 years.

With construction slated for this summer, PtSB is slated for completion in 2028. PtVC will start in 2028 and finish in 2030.

Contact David Alexander at d.todd.alexander@gmail.com 

Previous Santa Clara City Council Meeting:
Charter Changes Still Divisive at Santa Clara City Council Meeting
Santa Clara Sets its Sights on Relocating City Hall
Levi’s Stadium Capital Projects Approved Despite Division
Charter Changes Move Forward Despite Division