San Jose residents could pay more for clean energy

San Jose Clean Energy customers could see more rate changes—and will have less time to protest against it.

The San Jose City Council unanimously voted Tuesday to loosen regulations for how often San Jose Clean Energy—which provides renewable power to approximately 350,000 customers—can increase rates. The city’s clean energy provider was previously capped at increasing rates no more than two times a year. Now, there is no cap, and residents have just 15 days notice ahead of a rate change hearing compared to the previous 30-45 days.

Councilmembers also relaxed rules to allow San Jose Clean Energy to purchase more power at once in order to get the best price in a fluctuating market, and enter into short-term contracts—three years or less—without getting council approval. City administrators can sign off on contracts under 10 years, but anything longer requires council approval.

“These (changes) improve efficiency, reduce risks and maintain competitive rates,” San Jose Clean Energy Director Lori Mitchell said at the meeting.

The local utility is an alternative to PG&E that sells power a couple dollars cheaper per month—depending on what percentage of the energy is renewable—but in order to maintain lower rates, Mitchell said it needs to secure contracts faster. Having a mix of short- and long-term contracts helps ensure at least 90% of energy needs are covered for the next year, she said. However, with quick-moving contracts and an oscillating market, rates also need to be flexible.

Since 2020, San Jose Clean Energy has only changed its rates four times. The most recent rate change went into effect in January, which actually decreased rates by $4 a month compared to last year, spokesperson Amanda Orozco told San José Spotlight.

For the remainder of this year, Orozco doesn’t anticipate any rate changes that would have “significant impact” on customers.

“PG&E may change their (utility) rates on June 1 and since we compete with them we may need to adjust a few rates here and there to maintain our 1% to 3% discount for customers,” Orozco said, noting the utility’s ultimate goal is to only change rates once a year.

Zach Struyk, assistant director of San Jose Clean Energy, said the utility doesn’t intend to raise rates multiple times a year, but the flexibility to do so, and to do it quicker, allows for financial stability.

“We generally set rates annually,” Struyk said. “But if there were a disruption in the market or a significant regulatory change that increased our costs or reduced our revenue we would need to quickly adjust and recover costs.”

San Jose Clean Energy purchases wind, solar, geothermal and hydroelectric power and sells it to customers without intentions to turn a profit. Revenue collected is reinvested into community programs like electric vehicle charging infrastructure and energy efficiency incentives, or kept in financial reserves. The ultimate goal is to help San Jose be carbon neutral by 2030.

San Jose Clean Energy also plans to be more flexible with late fees. Before Tuesday, the city required adding late charges to bills if customers don’t pay their bills within 30 days of receiving a late payment notice. Now, customers have up to 90 days to make up payments and the clean energy provider has discretion over adding late charges.

“This is all about giving customers more flexibility and resources and notifying them of the help that’s out there as they recover from these economic impacts of the pandemic,” Struyk said.

Stay up to date on rate changes here.

Contact Jana Kadah at [email protected] or @Jana_Kadah on Twitter.