Uploaded: Tuesday, January 23, 2001 9 a.m.
the lights on:
An ongoing report of local power conditions
Local control benefits residents
Santa Clara, Alameda reap rewards of owning utilities
by Elizabeth Khuri
Palo Alto is not the only city with a municipally owned power supply.
Santa Clara and Alameda are also reaping the benefits of local control
as California's energy crisis continues to dominate the state's
For the last century, Santa Clara has controlled its power supply.
In 1896, Santa Clara's utility department began providing electricity
to the city with the purchase of 22 arc lamps and a diesel generator.
Now the department is known as Silicon Valley Power and is one of
the three largest municipally owned utilities in California.
Silicon Valley Power acquires energy from several different sources.
They own their own power plants, co-own other plants with various
cities, and enter long-term power contracts with outside sources.
Because of this diversity, the city enjoys some of the lowest rates
in the Bay Area--on average 35 percent less than residents of neighboring
Larry Owens, division manager of customer services for Silicon
Valley Power, said, "The fact that the company is over a century
old and nonprofit only helps to emphasize their efforts to maximize
benefits for their community."
According to Owens, this stability translates to low prices, even
in the face of California's energy crisis.
Flexibility is another benefit.
"Because of local control, we can respond to our customer base,
and our power is much more reliable, which is especially important
for our Silicon Valley customers," Owens said.
Applied Materials, Intel, National Semiconductor, Sun Microsystems,
3Com and Yahoo all use Silicon Valley Power.
Local control also enables the community to exercise influence
over where their power comes from. Owens stressed that the majority
of Santa Clara's power--85 percent--is non-fossil-based and non-nuclear,
stemming instead from geothermal and hydroelectric sources.
Alameda also profits from municipally owned power. For the past
113 years, Alameda Power & Telecom--formerly known as the City of
Alameda Bureau of Electricity--has supplied power to its residents.
Alameda's municipal enterprise is the oldest in California, in fact,
the oldest west of the Mississippi.
It was founded in 1887 with an initial investment of $40,000. Approximately
30 years ago, Alameda co-founded the Northern California Power Agency
with several other cities, including Palo Alto and Santa Clara.
Now almost 99 percent of Alameda's power comes from the Roseville-based
agency, which owns geothermal facilities in Lake County and Sonoma
The agency also owns hydroelectric generators in Calavaras County.
The collective clout of the agency ensures that member cities can
afford power from a variety of sources. Alameda has not produced
power within the city limits since 1924, when the cost of oil reached
the then-exorbitant price of $1 per barrel.
Alameda's residents also enjoy stable prices in the current vortex
of skyrocketing utility costs. This past year, there have been no
increases to the community's electric utility rates. Some of the
profits are also donated back to the community to fund the police,
parks and fire departments.
When state Assembly Bill 1890 passed in September of 1996, municipal
utilities companies were required to donate 2 percent of their gross
profits back to the city, a goal Alameda had already exceeded.
"When 1890 passed we were already giving more than that to the
community, so it was just transparent," said Alameda Power & Telecom
Communications Officer Matthew McCabe.
But the biggest benefit for residents, according to McCabe, is
the level of control local jurisdictions can exert over their own
"Most employees live and work in the city, so they can be held
directly accountable for their hard work," he said. "Decisions here
are directly influenced by residents, and decisions are made by
a local board in front of TV cameras, not in the back room of some
corporation far away."