San Jose to explore city-owned utility grid - San José Spotlight - San José Spotlight

San Jose to explore city-owned utility grid - San José Spotlight

San Jose may soon have a new, city-run power utility.

In name, at least. San Jose City Council will vote Tuesday to amend its city code to establish “San Jose Power” — a city-run electricity utility to capitalize on two new high voltage direct current transmission lines coming through San Jose.

“These lines are once-in-a-generation, if not longer than that,” San Jose Economic Development Director Nanci Klein San José Spotlight. “This application process is to directly take some of that (new) power … the city would be the distributor instead of PG&E, but in limited areas.”

This is not a utility residents will be selecting instead of Pacific Gas and Electric or San Jose Clean Energy, Klein clarified, instead it will be used for key infrastructure sites like the San Jose Mineta International Airport and the Diridon Station substations, which are in need of power, rebuild and expansion.

“We’re really interested in making critical infrastructure like the airport get reliable, resilient, lower cost power,” Klein said.

The city’s initial study estimates 15% to 25% cost savings on electricity. In the fall of 2022, PG&E shifted their backlog for new loads to the electric grid to prioritize safety-related wildfire resistance projects; the backlog for new projects is as much as seven years, according to a city memo.

“If there were an ability to get power sooner and at lower cost, then that would mean housing units faster, jobs faster, revenues faster,” Klein said.

The new utility could be used in the future to entice new business and housing development, particularly in North San Jose, where one of the new high voltage power lines will run, she added.

“It would be very attractive to a manufacturer to be in our area,” Klein said. “Could we get that power to some of the areas that are going to be building a lot of housing in North San Jose?”

Klein is even thinking about artificial intelligence companies that are looking to put down roots in San Jose and how this could be beneficial for them.

“With the hope to innovate and grow a lot of AI takes a lot of heavy data and infrastructure,” Klein said.

Not everyone is on board with a city-owned power utility. The International Brotherhood of Electrical Workers Local Union 1245 said they have members working for PG&E in and around the city, and are unaware of how a city-owned utility would affect their work. They submitted a letter to the city on Aug. 8 expressing their concerns.

“Staff assured council (last September) that it would endeavor to analyze the impacts of starting a SJC municipal electric utility,” IBEW1245’s letter reads. “There is no analysis of the size and scale of this proposal. There is no estimate of costs.”

Klein said the city would not be taking over any of PG&E’s existing utilities. There’s no indication yet as to how much the new city-run utility company would cost taxpayers.

“You have to be a power entity to submit the application,” Klein said. “LS (Power) and CAISO will then tell us in detail what is required to connect and how much it would cost … we’re committed to working through the research and analysis that would take at least two to (even) five years.”

CAISO is the state-chartered nonprofit that manages the wholesale electricity market for 80% of California, and the organization that’s approved and funded the new power lines. LS Power won the bid with CAISO.

The idea of forming a San Jose-owned public utility first came about during Mayor Sam Liccardo’s term. The city had been struggling with rolling blackouts and leaders were looking for alternative solutions, but ultimately his plan fell short.

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