1 City Council
Item No. 5, RTC 26-507
Public Hearing: Action to Waive
First Reading and Introduce an
Ordinance Granting a Non-
Exclusive Franchise to LS Power
Grid California, LLC for the Power
the South Bay and Power the Valley
Connector Projects, and Adopt a
Resolution Related to the Power the
South Bay Project Environmental
Impact Report.
July 7, 2026
Background
• California Independent System Operator (CAISO) oversees the operation of California’s bulk electric power system, transmission lines, and electricity market.
• 2023 – LS Power Grid California LLC (LS Power) selected to develop the Power the South Bay Project
• 2026 – LS Power selected to develop the Power the Valley Connector Project
• Projects will install underground electric facilities in Santa Clara 2 1
2 Item 5
2 Power the South Bay Project3Portion of Project in Santa Clara Power the South Bay4•High voltage (230 kV) overhead and underground electric facilities •Connects Fremont PG&E Newark substation through San Jose to SVP’s Northern Receiving Station•Santa Clara – Underground facilities along Lafayette Street•CEQA - March 2026 CPUC certifies project EIR3 4 3
Power the Valley Connector Project5Portion of Project in Santa Clara5 Power the Valley Connector6•High voltage (230 kV) underground electric facilities •Connects SVP’s Northern Receiving Station to PG&E San Jose B Substation•Santa Clara – Tentatively along Lafayette Street, Agnew Road, and Montague Expressway•CEQA - In development as alignment is under review5 6 4
Coordination Efforts•2023 – 2026 DPW/SVP/LS Power coordination on the Power the South Bay Project•April 2026LS Power submits application for a non-exclusive franchise•April 2026Fremont and San Jose enter into non-exclusive franchise agreements with LS Power•May 2026LS Power initiates coordination with Santa Clara on Power the Valley Connector Project7 LS Power Franchise•City Code Chapter 5.20 requires a franchise for LS Power to install, operate, and maintain facilities in the public right-of-way.•Allows LS Power to install and maintain underground facilities for the Power the South Bay Project, Power the Valley Connector Project subject to encroachment permits.8 7 8
5 Key Franchise Terms•Franchise Fee: 2.3% of the Santa Clara portion of its gross revenue (estimated at $175,000 annually).•Underground: only authorizes underground transmission lines.•Franchise Term: 10-years with automatic renewals for successive 10-year terms up to 40-years.•Encroachment Permits: Project will obtain encroachment permits prior to construction and complete construction outreach.9 Key Franchise Terms•Removal of Facilities: If franchise expires, is revoked, or terminated.•Maintenance: Maintain facilities in a good workman-like manner including pavement and trench in the public right-of-way.•Relocation: Relocate facilities for any future City project.•Other: 10–Indemnify the City–Post faithful performance security–Provide adequate insurance–Reimburse City staff time costs related to franchise 9 10
6 Franchise Procedure•June 9, 2026Council adopts Resolution 26-9568, Intention to Grant Franchise, and sets a public hearing for July 7, 2026•July 7, 2026Public hearing and introduction of an ordinance granting a franchise to LS Power•July 14, 2026Council to adopt an ordinance granting a franchise to LS Power•Aug 13, 2026Ordinance granting a non-exclusive franchise to LS Power takes effect11 Next Steps•If a franchise is granted:–Power the South Bay: Construction in Summer 2026 (after the 2026 FIFA World Cup) and tentatively completed by Summer 2028.–Power the Valley Connector: Alignment under review, CEQA underway, tentatively start construction in 2028 with completion in 2030.12 11 12
7 Staff Recommendation1. Adopt a resolution: (1) adopting the Power the South Bay Project Environmental Impact Report, prepared by the California Public Utilities Commission (A.24-05- 014; SCH NO. 2024071095); (2) making certain findings as the responsible agency for purposes of and pursuant to the provisions of the California Environmental Quality Act of 1970; and13 Staff Recommendation1. Adopt a resolution (con’t): (3) adopting a related Mitigation Monitoring and Reporting Program and Construction Impact Mitigation Plan, in connection with the approval of discretionary actions by the city necessary for the construction and operation of the Power the South Bay Project.14 13 14
8 Staff Recommendation2. Hold a public hearing, waive first reading, and introduce an ordinance granting a non-exclusive franchise to LS Power Grid California, LLC on terms and conditions set forth in the ordinance for the Power the South Bay and Power the Valley Connector Projects for the purpose of transmitting electric service in the City’s public rights-of-way. 15 City CouncilItem No. 5, RTC 26-507Public Hearing: Action to Waive First Reading and Introduce an Ordinance Granting a Non-Exclusive Franchise to LS Power Grid California, LLC for the Power the South Bay and Power the Valley Connector Projects, and Adopt a Resolution Related to the Power the South Bay Project Environmental Impact Report. July 7, 2026 15 16