(This story published on Jun. 26, 2005)
The 147-megawatt Donald Von Raesfeld Power Plant in Santa Clara went online in March – the first plant to go on the power grid in California since August 2003.
The $175 million plant can meet up to a third of the electricity needs for the 50,000-plus residential and business customers served by Silicon Valley Power, the city’s municipal electric utility. The plant was financed mostly through municipal bonds.
“This new power plant is the right size, in the right location, and built for the right reasons – to support the city’s longstanding goal of providing a highly reliable and independent source of energy at low rates,” said Santa Clara Mayor Patricia Mahan. “Our customers saved more than $60 million last year due to lower energy costs in Santa Clara.”
As a not-for-profit municipal utility, Silicon Valley Power is able to keep rates lower than the investor-owned utilities such as Pacific Gas & Electric. Electric rates in Santa Clara are 30 to 40 percent lower, and that, combined with the utility’s reliability, has helped attract large technology companies like Intel, Applied Materials and National Semiconductor, according to utility director Junona Jonas.
Santa Clara’s electric utility, which adopted the name Silicon Valley Power in 1998, was started 109 years ago as a lighting plant made up of 46 2,000-candlepower direct current lamps and a small electric generator.
Silicon Valley Power experienced a rolling blackout only once in its history – on June 14, 2000, during the state’s energy crisis.
Following that incident, the utility entered into a power reduction agreement with 21 of its largest customers, including Intel and Applied Materials, said Larry Owens, Silicon Valley Power’s division manager for customer services. Under the agreement, customers voluntarily reduced energy use during power emergencies. That arrangement is still in effect.
The utility was also able to keep its rates stable because it had purchased long-term power contracts before the energy crisis hit, thus avoiding having to buy on the volatile spot market.
Jonas said the Donald Von Raesfeld plant primarily replaces power previously obtained through a long-term contract with the Western Area Power Administration that expired last year.
The California Energy Commission awarded the license for the new plant on Sept. 9, 2003. Construction began the next day, and the facility was completed in 19 months.
Contact Michael Cronk at mcronk@mercurynews.com or (408) 920-5063.