Great news! Electric rates remain flat in 2018

Electricity rates in 2018 will remain flat, thanks to an abundant supply of inexpensive electricity from hydroelectric plants along with recent revenue growth from our business sector. This is in contrast to a series of recent rate increases made necessary by four years of drought that sharply reduced hydroelectric generation. 

The Santa Clara City Council adopted our proposed budget on June 13, 2017. The budget also reflects the ongoing cost of replacing aging infrastructure such as power poles, meeting the rising power transmission costs and replenishing reserves drawn down to buffer our rates during the drought. 

Holding to a zero rate increase is contingent upon legislators in Sacramento defeating a California Senate bill that would negatively impact our rates. SVP and other municipal utilities are working to educate legislators about the benefits of maintaining low rates for customers. 

In addition to the abundance of hydroelectric power, our diverse power resources such as wind, geothermal, solar and the City’s local modern natural gas plant provide managers with cost-effective choices to meet energy demand in the City. Our zero rate increase is in contrast to other nearby electric utilities that are raising rates by as much as 10 to 11 percent.

 

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Don’t Get Fooled – Our Green Power is Still the Cheapest!

You may start hearing about a new kind of electric company in the area that will claim their green power is a great deal for residents. What these “Community Choice” companies don’t say is that our 100 percent green and carbon-free program, Santa Clara Green Power, remains the lowest-cost plan in the South Bay Area. Period.

Our community is very proud that we pioneered the adoption of clean, renewable and affordable energy decades ago, and our award-winning green power program is now 13 years old. Last year, Santa Clara Green Power earned a position on the U.S. Department of Energy (DOE) National Renewable Energy Laboratory’s national top 10 listing that benchmarks green power programs.

We love new ideas that promote clean energy, but we want our customers to know that these new community choice power companies 1) do not offer electricity service in the City of Santa Clara, and 2) have rates that are higher than SVP’s for a comparable electricity product.

Take a look at the table below showing the residential green power prices proposed by one of the new companies, Silicon Valley Clean Energy compared to SVP rates, which average about 13 cents per kilowatt-hour (kWh) for 100 percent Santa Clara Green Power.

While these new companies are giving their customers more options in the region for buying cleaner energy, which is a good thing, we are proud to be an industry leader by offering 100 percent green power at much lower rates.

CCA Rate Comparison

Where Do SVP Customers’ Electric Bill Payments Go?

The City of Santa Clara monthly utility bill shows charges for several city services, including your electricity usage. Even though electric rates in Santa Clara remain the lowest in the state, rising costs require a rate increase of 2 percent in 2016, and many want to know why.

We wanted to ask customers about their understanding of our cost centers and how they might affect rates by choosing from the categories below. It’s helpful to know that we saved Santa Clara customers more than $100 million on their bills in 2014 compared to the rates paid in neighboring communities, where electricity customers pay up to 43 percent more for power.

See how you do in this quiz on where your electric bill payments go.

Which of the following expenses receives the most money from the bill payments made to SVP by customers?

  1. Salaries, Wages and Benefits
  2. Operations and Maintenance
  3. Maintaining Reasonable Profits
  4. The City of Santa Clara General Fund
  5. Purchased Power and Transmission

Answers:

  1. Is not correct. In fact, expenses for salaries, wages and benefits for our employees actually used just 8 percent of the our overall budget in the fiscal year 2014-15 and have remained at 7-8 percent of the budget for several years.
  2. Is not correct. Operations and maintenance, which includes replacement of aging infrastructure, modernization of our electric substations, and transition upgrades to the modern smart grid, receive about 10 percent of the revenue collected by us.  Even though 10 percent doesn’t seem like a lot, it keeps our power reliability in the top 10 percent nationwide.
  3. Is not correct.  Zero profits are reasonable for your locally owned, not-for-profit public utility.  However you judge it, profits are neither a cost center nor a motivation for us.
  4. Is not correct. The city’s General Fund supports the operations and services of the city and provides some services to us, but the city charter caps this amount at 5 percent of the revenue collected by SVP. This is instead of collecting a user tax from utility customers like most other cities do.
  5. Is correct. A whopping 71 percent of our budget goes for acquisition of the power used by our 53,000 residential, commercial and industrial customers in Santa Clara. Prior to the drought, purchased power ate up 64 percent of the budget in 2012. We own or contract for power from generating resources across the western U.S. such as geothermal in Sonoma and Lake Counties, wind turbines in California and Washington, solar from local and Kern County installations, hydroelectric in Northern California, local landfill gas and various other sources to assure that the city has the reliable power it needs at all times.

Even though the drought was one of the bigger drivers of increased cost recently, transmission costs associated with bringing the power to Santa Clara have tripled in the last five years and continue to go up.  Changes in the cost of purchased power and power transmission have the most impact on rates by far. Good decisions in this area have kept our rates low.dime_chart_ISC

A kilowatt hour (kWh) costs a bit more than a dime for most Silicon Valley Power customers. Here’s how the money from your electric bill payments is budgeted. The 5 percent of SVP revenue that goes to the City of Santa Clara general fund helps support City operations including police, fire, and library services.