Silicon Valley Power (SVP) reached a major milestone in the long, determined march toward sustainability when the Santa Clara, California, utility permanently eliminated coal power from its energy supply Jan. 1.
Various renewable resources and natural gas-fueled generation from Lodi Energy Center in Lodi, California, have replaced the 51 megawatts (MW) of coal-powered electricity SVP sourced from San Juan Generating Station in New Mexico. The move reduces the carbon intensity of Santa Clara’s power supply by about 50 percent.
Thanks to customers
The accomplishment began with both residential and business customers pushing the utility to reduce greenhouse gas emissions. SVP serves many forward-thinking corporations along with a highly educated and unusually engaged group of residents. “We launched the Santa Clara Green Power Program to meet customers’ demands for 100-percent renewable power as the state established its renewable energy goals,” stated SVP Customer Services Manager Larry Owens.
Santa Clara Green Power launched in 2004, two years after California adopted a renewable portfolio standard (RPS) and two years before the first expansion of the RPS. The city continued to monitor its emissions, evaluate resources and update its goals to stay ahead of state mandates, but mostly to meet and exceed customer expectations.
Keeping up with the expectations of business customers in the center of the technology industry has challenged SVP to keep reaching higher, too. SVP Public Benefits Manager Mary Medeiros McEnroe noted, “Many of our large key customers have corporate sustainability initiatives and have been the drivers behind some of our programs.”
Businesses subscribing to Santa Clara Green include Intel—a 62-wind turbine partner—Santa Clara University, the Great American Theme Park and the city itself. A number of large commercial customers have installed solar arrays on their facilities ranging from 750 kilowatts to 1 MW per site.
Speed bumps, fast lanes on road to success
There are pros and cons to being a leader in clean power initiatives and SVP has seen both sides as it moved toward its goal.
In 1980, SVP joined Modesto Irrigation District and Redding Electric Utility to form the M-S-R Public Power Agency, a partnership that has helped all three utilities evolve with the industry. In 2006, M-S-R worked to acquire 200 MW of new wind power in Brickleton, WA. “We all saw our customers buying more green power,” Owens recalled.
It was clear to the utility partners that a cleaner power supply was the road to the future. Around 2009, as the state set higher renewable energy goals and added new regulations, other California municipal utilities followed M-S-R toward the coal off-ramp. In some ways, Owen observed, the group effort gave utilities more leverage to negotiate their exit from coal power providers. On the other hand, “The more participants, the more complexity,” he said. “And there was a lot more competition for renewable energy. Ultimately, though, the cooperation among utilities was impressive.”
SVP knew that leaving their coal provider and finding cleaner power sources to replace the 51 MW was going to be difficult. But it paid off in the end when San Juan Generating Station permanently closed down half of its units. “We expected that they would just find another buyer for that power, so SVP going coal-free turned out to have a much wider impact by actually decommissioning two of the four units,” said Owens. “That was a nice surprise.”
Future is affordable
The greatest fear that grips utilities when they contemplate a future without coal—that it will force them to raise rates—has not materialized for SVP customers.
Utilities are always retiring and acquiring purchase power contracts over time, Owens pointed out, and that will affect pricing. Shifting to the Lodi Energy Center and ramping up green power caused some upward pressures on price for SVP. In the long term, however, “The forward price curves for natural gas and renewables look better than coal,” he stated.
Switching to those resources is also an investment in meeting federal mandates to reduce carbon dioxide, nitrogen oxide and sulfur dioxide emissions, he added.
Given the many factors that shape energy costs, SVP still boasts some of the lowest electricity rates in California. The utility recently announced that there will be no rate increase for 2018, and rates are expected to remain flat for the next couple of years.
Efficiency still matters
When rates inevitably change, SVP’s strong customer relationships and menu of long-established efficiency programs will help to ease acceptance.
SVP residential customers can get rebates for efficiency measures including attic insulation, ceiling fans, electric clothes dryers, electric heat pump water heaters and pool pumps. In addition to Santa Clara Green Power, the Neighborhood Solar Program allows customers to sponsor solar installations on public buildings. SVP also provides homeowners with energy audits and loans diagnostic tools to do-it-yourselfers.
While SVP counts some of the world’s most progressive companies among its large key customers, Medeiros McEnroe said that the small commercial customers are surprisingly engaged too. “Quite a few of our small businesses support Santa Clara Green Power, from dentists to auto shops, and many have installed solar arrays on their buildings,” she said. “Sustainability is a community value in Santa Clara.”
Keeping costs down is, nevertheless, still a top concern for small businesses, so SVP offers rebates for specific systems like lighting, as well as custom measures. The utility has also partnered with the Food Service Technology Center for a program to teach food service employees to manage energy and water costs.
SVP also provides energy benchmarking to help companies understand their energy and water use and set goals for improvement. “We have been able to help many customers through free snapshot audits and by educating them about the value of purchasing energy-efficient equipment,” Medeiros McEnroe said.
A utility customer program manager’s work is never done, and sustainability will always be a moving target. Achieving the coal-free goal is impressive but there are still peaks to manage and costs to control. WAPA has no doubt that with the support of its committed customers, SVP will meet each new challenge, exceed expectations and continue to impress.