Santa Clara electricity rates are going up

Santa Clara residents will see their electricity bill inch upward in the next year, as the city works on improving its power grid.

While much of Silicon Valley relies on Pacific Gas and Electric Company, the vast majority of Santa Clara residents get power from Silicon Valley Power. The Santa Clara City Council on Nov. 19 approved a 5% rate increase beginning Jan. 1, 2025 in a 6-1 vote, with Vice Mayor Anthony Becker dissenting.

The city owns and operates Silicon Valley Power, which has 60,685 customers as of 2023, about 51,000 of which are households. Officials cited rising costs for clean energy, materials, labor and balancing the utility’s budget as the reasons for the increase. Chief Electric Utility Officer Manuel Pineda said most of Silicon Valley Power’s sales are industrial, making up about 92% of the utility’s retail sales from fiscal year 2023-24. Residential sales make up about 6%.

“Having the large customer base allows us to reduce the cost for residential customers, because the industrial customers pay a big component,” Pineda said at the meeting.

Based on data compiled by the power utility, average users — households that use around 410 kilowatt-hour (kWh) monthly — will see their bills go up a little more than $3. That’s a jump from about $67.64 to $71.01 monthly.

Despite the hike, Silicon Valley Power is one of the most affordable energy providers in the state. PG&E’s lowest rate of 40 cents, offered at certain times through the utility’s tiered program, would still cost a user using 410 kWh about $164 monthly. PG&E’s electricity rates have gone up four times throughout 2024.

Councilmember Kevin Park pointed out while the 5% increase might seem small, it can have a big impact on low-income residents, especially households on a fixed income.

“It’s not enough that we maintain low rates, but we have to be cognizant of how we impact people with fixed incomes,” Park said. “Every single time we (increase rates) we’re taking away from their spending money.”

Councilmember Karen Hardy said projects such as the new transmission line between the North Receiving Station and Kifer Receiving Station benefit all users because it improves the electrical system’s reliability.

“Some people have it backwards, they think, ‘Oh, we had to raise the rates because we have data centers,’ but what’s going on is we are upping our reliability,” Hardy told San José Spotlight.

Hardy said she’s more concerned other utilities will increase at steeper rates, such as Valley Water’s proposed rate hikes. The region’s water infrastructure is older than Silicon Valley Power’s and needs costly repairs.

Residents who struggle to pay their Silicon Valley Power bills have payment support options, Councilmember Suds Jain said. He said the rate increase may have harsh impacts on low-income residents, and hopes more people learn about the assistance programs and the utility in general.
Silicon Valley Power has been working on more community outreach efforts to inform residents about how the power utility works. On Dec. 9, it plans to host “SVP 101,” so residents can get a general overview of the utility, learn about the utility’s rates system and how it handles growth.

“Energy is a lifeline service, we can’t cut anyone off because they can’t pay, so we have assistance programs,” Jain told San José Spotlight. “I hope someone’s not foregoing their insulin because they feel like they have to pay their electricity bill.”

Contact B. Sakura Cannestra at [email protected] or @SakuCannestra on X, formerly known as Twitter.