FROM: Mayor Mahan
Vice-Mayor Foley
Councilmember Cohen
Councilmember C
andelas
Councilmember Kamei
TO: HONORABLE MAYOR
AND CITY COUNCIL
SUBJECT: SEE BELOW
DATE: February 28, 2025
Approved: Date: 2/28/2025
SUBJECT: COOPERATION AGREEMENT BETWEEN PACIFIC GAS AND ELECTRIC COMPANY AND THE CITY OF SAN JOSÉ FOR ELECTRIC INFRASTRUCTURE
DEVELOPMENT
COUNCIL AGENDA: 3/4/2025
FILE: 25-183
ITEM: 3.4
RECOMMENDATIONS:
Accept staff recommendations and the joint memo from Mayor Mahan, Vice-Mayor Foley, Councilmembers Candelas, Cohen, and Kamei and the following recommendations:
1. Approve the framework for the cooperative agreement between Pacific Gas and Electric Company and the City of San Jose along with the memo submitted by Mayor Mahan and Councilmembers Cohen, etc.
2. Include information regarding the power needs and the risks around power availability as the 159-acre development in Regional Wastewater Facility owned lands moves forward as part of the study session on San Jose Municipal Power on March 21.
3. In the March 21 study session, provide additional information about the risks and benefits of retaining the option of a Municipal Utility in case the PG&E agreement doesn’t result in expected outcomes and how the LS Power timeline of completion in 2028 affects San Jose’s flexibility.
BACKGROUND
We are thankful for city staff’s continued work on the agreement with PG&E to ensure that the City is future proofing our infrastructure. We are also grateful for the PG&E’s willingness to work with the city to make sure our electrical delivery needs will be met as development continues, particularly in North San Jose. We are hopeful that the agreement will set in motion a framework for successful delivery of power to customers large and small.
LS Power, a leading energy infrastructure company, is in the process of building a new transmission connection that will allow the City of San Jose to directly receive power from alternative sources. This infrastructure development presents an important strategic consideration for the city. Even if San Jose does not immediately choose to connect to LS Power’s system, it is crucial to keep this option open as a viable alternative to PG&E. Maintaining access to an independent delivery source would provide the city with contingency option should PG&E’s reliability and cost structure become unsustainable.
HONORABLE MAYOR AND CITY COUNCIL
Subject: COOPERATION AGREEMENT BETWEEN PACIFIC GAS AND ELECTRIC
COMPANY
By maintaining an open pathway with LS Power, San Jose ensures it is not solely dependent on PG&E for energy delivery. This flexibility strengthens the city’s ability to secure competitive energy prices, ensure delivery reliability for large scale customers, and advance clean energy initiatives and objectives.
A measured approach that includes ongoing discussions with PG&E, maintaining infrastructure options with LS Power, and conducting due diligence on municipal utility feasibility ensures that the city retains flexibility and leverage in shaping its power landscape. By doing so, San Jose can better protect residents, businesses, and its long-term economic stability, regardless of the direction energy markets take in the coming years.
The signers of this memorandum have not had, and will not have, any private conversation with any other member of the City Council, or that member’s staff, concerning any action discussed in the memorandum, and that each signer’s staff members have not had, and have been instructed not to have, any such conversation with any other member of the City Council or that member's staff.