2025 POWER MIX AND
RATES
City Council
February 25, 2025
Zach Struyk, Acting Director
Lina Williams, Deputy Director, Account Management and Marketing HOW DID WE DO LAST YEAR?
1 Year End Balances (Millions) CY23
Actual
CY24
Expected*
Unrestricted Cash $208 $260**
Operating Reserve in Days @ $1.1M / $1.4M per day*** 196 192 *Pending release of audited financial statements
**Excluding $50 million Rate Stabilization Reserve
***Based on trailing 12-month cost
CY24
• Moderate weather and energy market conditions allowed SCJE to beat its forecast and grow reserves to $260M unrestricted cash and a $50M rate stabilization reserve. • SJCE GreenSource customers as a whole paid approximately 3.2% less than PG&E customers over the full year.
RATE-SETTING GOALS
1. Use cost-of-service model for
setting rates
2. Offer competitive and stable
rates
3. Build and maintain reserves of
at least 180 days of operating
expenses*
2 * San Jose Clean Energy Financial Reserves Policy
2025 SJCE REVENUE REQUIREMENT
3 All costs that need to be recovered from customers determine the projected SJCE revenue requirement. A $5M contribution to reserves is 1.1% of revenue. Power supply costs are expected to decrease vs 2024 due financial benefit of long-term power purchase agreements and lower market prices.
Cost and Revenue Requirement (millions) CY 2025 Forecast Better Expected Worse
Power Supply Cost $415 $435 $455
Non-Power Supply Cost, net $33 $33 $33
Contribution to Reserves $5 $5 $5
Total Revenue Requirement $453 $473 $493
STRATEGY: COMPETITIVE RATES AND INCREASE
RENEWABLE CONTENT
• Proposed GreenSource rates are approximately 8.5% less than PG&E, ranging from 7.2% to 9.5% depending on Customer Class.
• SJCE rate strategy should add approximately $5M to operating reserves in 2025 (important to maintain a positive contribution for credit agreements). • Typical GreenSource customer is expected to pay on average $4.80 less per month for SJCE generation charges
• Total customer bill savings relative to PG&E are approximately $38 million over 2025 calendar year
• Increase renewable energy content of GreenSource and SJ Cares from 60% to 62% and retain 100% renewable for TotalGreen
4 COMPETITIVE PRICING VS PG&E
• Set GreenSource rates on
average 8.5% less than
PG&E.
• Customers will pay 9.1% less
on average in CY 2025 than
CY 2024
SJCE 2025 SERVICE OPTIONS
GreenSource TotalGreen SJ Cares
62% Renewable 100% Renewable 62% Renewable
Better value
GreenSource is SJCE’s standard
service that will provide more
renewable energy than CA
requirements.
Climate conscious
TotalGreen is an easy, cost-
effective way to power homes
and businesses with 100%
renewable energy.
For San José’s lowest income
earners
Customers enrolled in the CARE
or FERA state programs.
A renewable power mix target of 62% for GreenSource and SJ Cares will allow SJCE to comply with its state emissions reduction requirements and continue providing cost-competitive rates.
OPERATING RESERVE
7 Forecasted CY 2025 Ending Reserve Balance ($ in Millions) Better Expected Worse
CY 2025 Unrestricted Cash excluding Rate Stabilization Reserve $285 $265 $245 Operating Reserve in Days, December 2025 219 204 189
Forecasted FY24-25 Ending Balances ($ in Millions)
Better Expected Worse
FY24-25 Unrestricted Cash excluding Rate Stabilization Reserve $273 $263 $253 Operating Reserve in Days, June 2025 203 195 188
STAFF RECOMMENDATION
8 Adopt a resolution to:
1. Increase the renewable energy content of GreenSource from 60% to 62% renewable and set rates according to the rate schedule in Attachment A, effective March 1, 2025.
2. Continue to set the rate for TotalGreen to $0.01 per kilowatt-hour above GreenSource for all rate schedules according to the rate schedule in Attachment B, effective March 1, 2025, and maintain the renewable energy content of TotalGreen at 100% renewable.
3. Increase the renewable energy content of SJ Cares from 60% to 62% renewable and set rates at a 10% discount to GreenSource rates, according to the rate schedule in Attachment C, effective March 1, 2025.
Zach Struyk, Acting Director
Lina Williams, Deputy Director Account Management and Marketing