On Dec. 6, 2022, the City Council approved a rate increase for Silicon Valley Power (SVP) of 8% effective Jan. 2023. The rate increase is necessary to cover the increased cost of generating and delivering power to Santa Clara residents and businesses. Generation, transmission and distribution costs are the largest expenses for the utility and are expected to increase much more than previously anticipated. This increase in costs, along with pressures from inflation, drive the need for the rate increase.
The projected increase in electric distribution costs reflects a 25% increase in electric transmission rates that the utility pays for use of the transmission system to move power from remote generation facilities to the local power grid. It also includes a 36% increase in natural gas transportation rates for the delivery of fuel to gas-fired power plants.
This funding is necessary to maintain the current level of service, help fund capital improvement projects needed to update aging infrastructure, expand the infrastructure to accommodate electrification and increase renewable energy generation to meet State and local climate mandates.
City staff says it is taking a “closer look” at the numbers and will be a “little more conservative” moving forward. When asked if there was a way to phase in increases, City staff said if it were to do less right now, it would likely mean another increase mid-year or a larger increase down the line.
For the average residential electric customer using approximately 420-kilowatt hours per month, the proposed 8% rate increase equates to approximately $4.40 more per month. High users (1,000-kilowatt hours per month) are expected to see a monthly increase of about $10.72.
SVP reports that even with the increase, rates are still “significantly lower than PG&E.” Approximately, 57% lower to be exact.
Actual impacts on Santa Clara residents will vary based on each customer’s actual energy usage. Silicon Valley Power continues to offer financial assistance to income-qualified customers in addition to ongoing energy efficiency programs to help customers lower their electric bills. For more information on available programs visit the Silicon Valley Power website.