TO: RULES AND OPEN FROM: Kip Harkness
GOVERNMENT COMMITTEE
SUBJECT: See Below DATE: February 6, 2025
Approved Date
2/14/25
SUBJECT: San José Municipal Electric Utility Exploration Special Meeting
RECOMMENDATION
Set a City Council Special Meeting entitled San José Municipal Electric Utility Exploration for Friday, March 21, 2025 from 9:00 a.m. – 12:00 p.m. in the City Council Chambers and approve the Special Meeting agenda.
BACKGROUND
On October 3, 2023, the City Council unanimously voted to amend Titles 2, 4, 26, and 28 of the San José Municipal Code to create a municipal electric utility in order to establish the legal framework for the City's authority to generate, purchase, and distribute electricity. In the same action, the City Council directed staff to explore the possibility of establishing San José Power to provide electric service in selected areas of the City. The City Council directed staff to consider four key questions as a guide to the exploratory phase listed below.1
If the City were to provide municipal utility for electric service in limited areas of the City, could that be done in a way that would:
1. Reduce electricity energy costs?
2. Allow the development of more innovative and energy efficient buildings such as that envisioned in the planned Downtown West development?
3. Increase the electrical resilience of the City of San José and critical infrastructure for both climate change and emergency response?
4. Enable the City to attract and retain the skilled and trained talent required to perform this work effectively and reliably?
1 https://sanjose.legistar.com/View.ashx?M=F&ID=12337526&GUID=7539B1D7-DF65-4F16-910DF222B98C7211 RULES COMMITTEE: 2/19/25
ITEM: B.2
RULES AND OPEN GOVERNMENT COMMITTEE
February 6, 2025
Subject: San José Municipal Electric Utility Exploration
Since October 2023, staff has evaluated the answers to these questions based on a business case, staffing plan, and financing strategy. At the March 21, 2025 San José Municipal Electric Utility Exploration Special Meeting, staff will provide the City Council with the results of the exploratory studies, an understanding of the Administration’s exploration of becoming a municipal electric utility provider, and the recommended path forward. The Special Meeting is expected to establish a common understanding of electricity's critical role in San José’s future and the unique opportunity at hand.
ANALYSIS
The San José Municipal Electric Utility Exploration Special Meeting will cover the topics below.
1. Overview – The Role of Electrical Infrastructure in San José’s Economic Development
2. San José Power Opportunity
3. PG&E Partnership Opportunity
4. Recommended Path Forward
a. Evaluation of Options
b. Building the Team
c. Driving Delivery – Transparency, Accountability, and Objectives as Measured by Key Results
d. New Ways of Doing Business – Process and Design Improvements e. Workforce Development
f. Best Alternative to a Negotiated Agreement
5. Conclusion
Staff will present the results of staff’s exploration studies and the outcome of staff’s evaluation of the desirability and viability of the City establishing a municipal electric utility. The City Council will consider approving the next step in the City’s partnership with PG&E by granting authority to negotiate and execute the PG&E–City of San José Implementation Agreement, which includes funding for key positions and consultant support. Additionally, the City Council will recommend that the Administration continue evaluating the feasibility of a municipal electric utility should PG&E fail to meet the terms and performance standards outlined in the agreement.
/s/
Kip Harkness
Deputy City Manager
For questions, please contact Erica Garaffo, Assistant to the City Manager, Lead Resilience Strategist, at [email protected].
Attachment: Special Meeting Agenda