After months of debates and delays, the San Jose City Council unanimously voted to approve the creation of a new, publicly-owned power utility — San Jose Power — on Oct. 3. The project is touted as an opportunity to supply power at lower rates and aid more competitive development of the tech industry.
“The voting was delayed once for about six weeks in order to give time for more conversations between the city’s Energy Department, the stakeholders at PG&E and the Electrical Workers Union, to get a better understanding about the city’s proposal,” San Jose District 4 councilmember David Cohen said.
SJP is still in the exploratory phase, as more research is needed to determine if the implementation of a new power utility is worth the investment. However, the city claims that its early studies showed a 15 to 25% reduction in electricity costs. The city also plans to release a financial plan for SJP in 2025, which is scheduled to start offering power in 2028.
“I think it’s good that we have a more local service,” sophomore and JSA club secretary Vikrant Vadahavoor said. “Especially when the city can control its own actions rather than relying on a private enterprise.”
It is unclear whether or not SJP will serve residential areas. For now, it aims to bolster key infrastructure areas such as San Jose Airport and Diridon Station in order for them to receive reliable power at a lower cost. It also aims to expand development by attracting tech companies with these decreased electricity costs.
“The basic premise is to create a power highway that the city can use to fund projects and entice companies to move to San Jose because of the potential of lower power rates,” history teacher and department lead Steven Roy said.
The new power utility would operate on two high-voltage power lines that will run through San Jose, with California Independent System Operator, a state-chartered nonprofit that manages the wholesale electricity market for 80% of California and funded the new lines.
The proposal for San Jose to create its own power utility dates back to former Mayor Sam Liccardo’s term from 2015 to 2023 when his administration started looking for alternatives to PG&E after the already unpopular power utility company faced a wave of financial difficulties and criticisms over its poor handling of operations during power outages.
However, the city clarified that, as of right now, PG&E and San Jose Clean Energy will be working in tandem, aiming to provide the city with more reliable support rather than cutting ties with PG&E entirely.
“We will continue to provide all of the electricity infrastructure for everybody through PG&E, and we will continue to have all the distribution lines and transmission lines that they currently have,” Cohen said. “But separate lines that would be owned and operated by the San Jose municipal utility could be installed, and they would be operating at the same time as PG&E’s existing distribution.”
Many argue that a new power utility could cause displacement of current PG&E workers. The International Brotherhood of Electrical Workers Unit 1245, which represents over 25,000 workers in Northern California, sent a letter to the city regarding concerns that the new power utility could displace workers in the long run.
“In reality, since we’re not planning to take over PG&E and its infrastructure, all of the workers performing infrastructure maintenance would still be needed,” Cohen Said. “So I don’t believe that there’s any risk posed to current PG&E employees for this project.”
Despite claims and mixed opinions that surround the creation of SJP, it is too early to jump to conclusions until further research is done on evaluating its possible impacts.
