May 23, 2023 Agenda Item #23-479
City Council
Item 7
CITY OF RTC 23-479: Adoption of a
Resolution Amending Rate
Schedules for Electric
1852
Services
THE MISSION CIT
May 23, 2023
City of
Santa Clara
The Center of What's Possible
Public Outreach
• March/May - Sent notification on City's email platform, GovDelivery • April - Notification to Schools and State Agencies
• March/May - Posts to Social Media - Twitter, Facebook, Nextdoor • May - Held meeting with SVP Key Accounts
• June - Inside Santa Clara Summer edition article
• Monitoring Social Media for questions and comments
POST MEETING MATERIAL
City of
Santa Clara
The Center of What's Possible
Need for Increase
• Mid-year increase is the first one since 2006
• Driven by historic surge and increase-of natural gas prices which affected Power Prices • Prices expected to continue higher than previous years • Regular January Increase did not account for this unanticipated event 260
210
160
110
60 10
498808808998898998528898988898998928488928428428
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 • Average of Actual NP15 - Average of NP Futures
City of
Santa Clara
The Center of What's Possible
Budget Highlights
Northern California Natural Gas Prices for Last Two Winters • Historically High Natural Gas Prices
- Increased costs for market power
purchases - Approximately 200 MW of
market purchases with cost up to 400%
SAMAN 30
higher than budget
• Continued Council updates through
presentations and emails
• February 7 Presentation - Resource and
-Hen 2022 201 -tay 2021 tar 2077
Production costs $75.0M over budget
• Implemented a number of budget
actions
City of
Santa Clara
The Center of What's Possible
Budget Actions
CALIFORNIA TODAY
• Actively Tracking Budget, Options, and Cost
Saving Actions What's Fueling California's High
- Liquidate partial natural gas position ($8 Million) Natural Gas Prices Transportation problems, cold weather and low storage have all - Lawsuit resolution ($18.5 million) contributed to higher gas bills. - Defer Capital Projects ($12.8 Million)
- Sale of excess Renewable Energy Credits (FY
A 385% Gas-Bill Jump Stuns Californians
2023/24)
Facing Cold, Wet Winter
- Higher cost energy sales
- Hydropower production
• Estimated deficit approximately $70 million Noticed a high utility bill recently? Natural gas prices are rising in California.
- Use of cash balances
City of
Santa Clara
The Center of What's Possible
Statewide Issue
• California Independent System Operator - almost $4
PacifiCorp
billion additional spent on power over previous years for just December and January
• $5 billion additional spent on power for the State over previous years
• California Public Utilities Commission investigating natural gas price causes and impacts to energy markets
California
• Governor's letter urges FERC investigation of high natural ISO
gas prices
• Multiple utilities are having higher than typical increases - Research shows increases this year ranging from 7.5% to 30% - PG&E increased 27% in the last 1.5 years
Source: CAISO
City of
Santa Clara
The Center of What's Possible
Budget Considerations
• Maintaining two key reserves at the required minimums • Need to increase "cash in hand" - affects bond ratings • This increase does not solve the budget issue caused by the historic gas prices
- 7% increase proposed January 2024
- 7% increase under consideration January 2025
- Current estimates
• Estimating a 3-4 year recovery period
• Tracking budget continuously
- Will additional actions be needed?
• What effect will Hydropower have?
McKay Dam - NCPA
City of
Santa Clara
The Center of What's Possible
Tracking Budget
• Meeting/reviewing regularly to review resource and
production costs, actual costs to date, and 10-year
model analysis
• Adding to our budget tracking system
- Started in 2021 but put it on hold for other priorities • MS Power BI/Data Visualization software (end of
2023)
- View/Monitor our financial information using multiple variations
- Monitor electric market conditions
- Track key performance indicators
- Customizable reports based on the needs of the user
- Other items
City of
Santa Clara
The Center of What's Possible
Monthly Bill Comparisons
2023 Residential Customer Change
Low User (300 kWh) Average (420 kWh) High User (1,000 kWh) Before $42.44 $60.05 $145.10
Proposed $44.56 $63.04 $152.33
Increase
$2.12 $2.99 $7.23
2023 Commercial/Industrial Customer Change
Large
Small Business C1 Commercial/Small Large Industrial CB-3 (1,000 kWh) Industrial CB-1 (2,000,000 kWh)
(500,000 kWh)
Before $217.88 $78,398 $288,082
Proposed $228.88 $82,310 $302,443
Increase
$11.00 $3,912 $14,361
City of
Santa Clara
The Center of What's Possible
Rate Comparison with 5% rate increase
SVP vs PG&E Average Rates
SVP Average Rates PG&E Average Total PG&E Avg Rate Increase as of 07/01/23 Rates as of 03/01/23 SVP Lowerthan SVP Lowerthan Over 5 Months Class of Service ($/kwh)* ($/kwh) * PG&E ($/kwh) PG&E (%) 10/1/22 - 3/1/23 Residential D-1 E-1
$0.151 $0.363 $0.211 58% 7.4%
Small Commercial C-1 B-1
$0.224 $0.346 $0.121 35% 6.2%
Large Commercial CB-1 B-10S
$0.165 $0.324 $0.159 49% 7.4%
Small Industrial CB-1 B-19S
$0.165 $0.285 $0.120 42% 8.6%
Large Industrial CB-3 B-20P
$0.149 $0.240 $0.091 38% 8.9%
Very Large Industrial CB-6 B-20P
$0.133 $0.240 $0.107 45% 8.9%
* Average rates based on estimated forecasts, including surcharges. Average rates are provided for general reference. Individual customer's average rate will depend on customer's applicable kw and kwh
* This comparison does not factor in the additional user tax charge levied in most PG&E service jurisdictions (typically 5%). Santa Clara customers are not charged these additional fees.
City of
Santa Clara
The Center of What's Possible
SVP vs PG&E Rates
Class of SVP Rate PGE Rate Class of SVP SVP
Service Increase Increase Service Lower Lower
2016-23 2016-23 2016 2023
Residential 31% 71% Residential 46% 58%
Commercial 29% 56% Commercial 21% 35%
Large Comm 32% 69% Large Comm 35% 49%
Small Indus 32% 73% Small Indus 24% 42%
Large Indus 28% 70% Large Indus 18% 38%
SVP budgeted rate increases will be higher the
typical the next few years
11 City of
Santa Clara
The Center of What's Possible
Residential Climate Credit
• Proposed $30 per household electric
Silicon Valley Power
meter credit would be applied on August will issue a
UTILITY
Bill BILL
one-time
APRIL/MAY
• $1,526,670 one-time expenditure based $30 $30 credit
on approximately 50,889 residential 'BILL
CREDIT
on ALL RESIDENTIAL
meters
electric bills.
• Credit is funded by the Green House Gas 00,930
reduction program per the Cap-and- S.SS
Trade Regulation under permitted use
for residential customers
12 City of
Santa Clara
The Center of What's Possible
Customer Support
• Reminder - SVP applied and received funding from the California Arrearage Rate Assistance Program
- SVP received $1.3 million
- Provided support for almost 8,000 residential customers - Average amount was $164
• Increased our Rate Assistance Programs
- Financial Rate Assistance Program (FRAP) - 35% rate discount for first 300 kWh, 25% rate discount from 300-800 kWh
- Low Income Home Energy Assistance Program (LIHEAP) - 40% rate discount for first 300 kWh, 25% rate discount from 300-800 kWh • Energy Efficiency Rebates and Programs still available 13 City of
Santa Clara
The Center of What's Possible
Recommendation
Adopt a Resolution amending Rate Schedules for Electric Services to Increase Electric Rates and Charges in Each Rate Schedule by 5 Percent (5%), effective July 1, 2023.
14 City Council
Item 7
RTC 23-479: Adoption of a
Resolution Amending Rate
Schedules for Electric
1852
Services
THE MISSION CITY
May 23, 2023