The Santa Clara City Council may need to sell a city-owner property to help fund increased costs for Silicon Valley Power.
At a study session March 27, the Council heard from John Roukema, Director of Public Utilities, on options to ensure the City is able to serve increased energy demand while meeting state-mandated requirements on renewable energy.
The property in question, the Loyalton property, a 10,000-acre parcel located at 881 Martin Ave., could fetch up to $13 million. That money could be used to fund a $25.7 million need to build a new building for Silicon Valley Power. Another $70 million in infrastructure maintenance is also needed to keep up with energy demand. Energy demand in Santa Clara has grown by 50 percent since 2008. Santa Clara now has a greater energy demand per square mile than New York city.
Staying ahead of the most aggressive estimates of how much energy demand will grow is paramount, Roukema said.
“There is a lot changing out there in the world. There is a lot of technology and innovation changes,” he said. “Assuming things will grow exponentially is tough … [but] if we don’t have a plan to stay ahead of [the highest estimates] then we are limiting the growth.”
The City is ahead of state mandates on renewable energy. With 39 percent of Santa Clara’s energy coming from renewable sources, Roukema said the City can afford to be “picky” with what contracts it enters into. Although the City has stopped using coal, the City’s energy portfolio remains diversified.
As companies look to amp up development, Roukema said Silicon Valley Power requires the company to provide a substation on its property to offset the increase in energy use. Then, Silicon Valley Power marks up energy sold to those customers to ensure other customers don’t pay for the increase in cost because of the new development’s energy use.
Further, if the trend of businesses and residents self-generating continues, it will decrease transmission costs, Roukema said.
The City has explored several options for the Loyalton property for decades but has been unable to find a viable use for the property. It has explored everything from pheasant farming to gold mining and wildlife refuge. So far, the only endeavor that has brought money back to the City has been to use it as cattle grazing land. That use brings roughly $30,000 a year into the City.
Council Member Debi Davis said while she supports the idea of putting Silicon Valley Power with the rest of city hall, she doesn’t support selling Loyalton.
“We need revenue streams,” she said.
The rest of the Council disagreed. Council Member Pat Kolstad said the City is better off selling the property and collecting interest on the money.
“There is just no profit in it for the City going forward,” he said.
Although the state does not include hydro-generation as a renewable energy resource, if one counts hydro-generation, the City has already met its 2030 goal of having at least 50 percent renewable energy, something Kolstad said should be applauded.
Suds Jain, a Santa Clara resident and a member of the Planning Commission, was the only member of the public who spoke on the presentation. He said renting space for City operations is a waste of time and that the City should look into having more electric vehicle charging stations at schools since teachers often commute long distances. Further, converting all the City’s traffic signals to LEDs would also help with sustainability, he said.
Holding onto Loyalton is not a worthwhile pursuit, he added.
“It is something we should get rid of and invest in something else,” he said.
Mayor Lisa Gillmor agreed with Jain’s sentiment, saying that “something bothers [her] about paying rent.” She added that since the operations of the City have grown so much over the past few years, if the City is going to sell the property it is going to “do it the right way.”
While Gillmor said selling property should be a “last resort,” she said if the City is going to sell Loyalton, it has to be able to “take advantage of the market.” She agreed that Silicon Valley Power should be centralized with the rest of city hall.
“It is not secret that these buildings are obsolete,” she said.