Who Really Pays for Santa Clara's Cheap Electricity

In 2025, Silicon Valley Power served about 54,000 residential accounts, and together they bought 5.1 percent of the electricity the utility sold. Just 1,287 industrial accounts bought 92.1 percent. That imbalance explains much of why a house in Santa Clara costs less to run than a similar house across the line in San Jose, Sunnyvale or Cupertino. A listing won't tell you any of this. It shows the price, the square footage and the property tax. It doesn't show that a home inside Santa Clara city limits buys its electricity from a city-owned utility and not from PG&E.

Silicon Valley Power, or SVP, is the City of Santa Clara's own electric utility. It covers an 18.41-square-mile service area and sells to the residents, organizations and businesses of the city. Gas is the exception. The city's utilities FAQ says the city provides most utility services, including electricity, and PG&E provides the gas. So a Santa Clara household pays two energy bills. How much it saves depends mostly on how much of the house runs on electricity.

Who buys the power

SVP's December 2025 fact sheet splits 2025 sales this way:

"Industrial" doesn't only mean data centers, but data centers make up a large share of it. In a 2025 Stanford report, an SVP assistant director estimated that data centers used about 60 percent of SVP's power sales. According to the city's October 2026 staff report, Santa Clara has 56 stand-alone data centers active or under construction, plus two approved but not yet built.

Data centers draw power around the clock, so the grid is busy steadily instead of in short peaks. SVP's system load factor was 78.6 percent in 2025. The poles, wires, substations and staff cost about the same whether the system sells a little or a lot. When almost all of the volume goes to large, steady customers, each household carries a smaller share of those fixed costs. The city made the same point in its own October 2026 news release:

"Large customers' around-the-clock demand also spreads fixed system costs across more sales, helping keep Santa Clara's electric rates 33% to 57% below neighboring utilities."

What that looks like on one month's bill

SVP publishes a side-by-side comparison. Its average residential rate was $0.182 per kilowatt-hour as of January 1, 2026. PG&E's average bundled residential rate was $0.422 as of September 1, 2025, which makes SVP 57 percent lower. SVP's comparison also leaves out the local user tax that most PG&E service areas add, typically 5 percent. Santa Clara doesn't charge it.

San José Spotlight ran the numbers for one household in a January 2026 fact brief. At 411 kilowatt-hours a month, an SVP customer would pay about $75. A PG&E customer on a time-of-use plan, using the same amount at peak hours, would pay about $201, based on PG&E's December 2025 peak rate of $0.48974. That's a difference of about $126 a month, or roughly $1,500 a year. The usage figure is realistic. Dividing SVP's 2025 residential sales by its residential accounts gives an average of about 400 kilowatt-hours per household per month.

The Spotlight example assumes every kilowatt-hour is used at peak, so it shows the widest version of the gap. The narrower comparisons still point the same way. SVP charges a monthly meter fee of $5.11. Since March 1, 2026, most PG&E residential customers pay a Base Services Charge of $24.15 a month. Customers enrolled in PG&E's CARE or FERA assistance programs pay $6.00 or $12.08. Many neighboring households also buy their generation from a community choice provider such as Silicon Valley Clean Energy, but SVCE notes that those customers still pay PG&E delivery charges.

The gap grows with every electric appliance

The average comparison understates the gap for one kind of buyer: a household that charges an EV at home, heats with a heat pump or plans to give up gas. Every added appliance adds kilowatt-hours, and SVP's price for those extra kilowatt-hours stays low.

On SVP's time-of-use schedule, usage above 300 kilowatt-hours a month costs $0.16023 off-peak and $0.20295 at peak, effective January 1, 2026. On PG&E's E-TOU-C plan, effective June 1, 2026, total bundled rates are 36.757 cents off-peak and 39.757 cents at peak in winter, and 39.940 cents off-peak and 52.240 cents at peak in summer. PG&E's peak window runs from 4 to 9 p.m. every day, and an 8.140-cent credit applies to usage within a household's baseline allowance.

Take overnight EV charging as an example. In winter, each kilowatt-hour above SVP's 300-kilowatt-hour tier costs about 16 cents in Santa Clara. Under PG&E bundled service, the off-peak price is about 37 cents before any baseline credit. SVP has no special EV rate, and its rates page says residents already get low rates all day. SVP also offers rebates aimed at households that electrify:

• Home EV charger: $350 per charging station, up to two per account.
• Heat pump HVAC: $3,000 per ton, up to $10,000, when replacing a gas furnace, or $1,000 per system when replacing electric-resistance heat. Income-qualified customers may be eligible for up to $1,000 more.
• Solar-paired battery: $0.15 per watt-hour, up to $2,700, with $2,000 bonuses for eligible FRAP and LIHEAP customers.

Rooftop solar works differently here too. SVP hasn't reached the state threshold of 5 percent of its aggregate peak demand. After crossing it, SVP would no longer be obligated to offer net metering to new solar customers, and any successor tariff would need City Council adoption. Its current NM schedule offers net billing on a first-come, first-served basis until the generating-capacity limit is reached. Its 2026 payment for annual excess energy is $0.05366 per kilowatt-hour. SVP says any future successor tariff may be structured and priced differently from the NEM 2.0 and NEM 3.0 tariffs other utilities offer. Cheap grid power also changes the case for solar, because each kilowatt-hour a panel replaces is worth less in Santa Clara than in PG&E territory.

Data centers also help fund the city budget

The same industrial customers support Santa Clara's General Fund. Since 1951, the city has transferred 5 percent of electric utility revenues to the General Fund, and voters reaffirmed that transfer with Measure G in 2022. In fiscal year 2025/26, the transfer totaled $45 million, and the city attributes $23.2 million of it, or 52 percent, to data centers. Counting property and sales taxes as well, the city estimates data-center contributions to the General Fund at $35.2 million for that year.

So the industrial load lowers household electric rates and also helps pay for city services. It also explains why the cost of expanding the grid matters to homeowners. The city's October 2026 release addresses that cost:

"Residents do not pay for infrastructure built to serve that growth."

Under California's cost-of-service rules, large customers pay through the city's Load Development Fee for the upgrades their added demand requires. In a February 2026 summary of SVP testimony, the utility said data centers also pay their share of system upgrades that serve both new capacity and the replacement of aging equipment.

The rate path and the buildout

Growth has hit the system's limits. SVP stopped accepting new data-center electric-load applications in 2023 because requests exceeded the capacity it had available, and that pause was still in effect in October 2026. San José Spotlight reported in May 2025 that SVP's sales grew 25 percent from 2019 to 2023. The utility is now partway through a $459 million system expansion meant to double its electric-load capacity. SVP's September 2026 presentation lists these milestones:

1. Northern Receiving Station, scheduled for the second quarter of 2028.
2. Scott and Kifer receiving-station projects, scheduled for mid-2029.
3. A broader program the city says is on track through 2030.

Residential rates have risen during the buildout, but slowly. The City Council approved a 5 percent increase effective January 1, 2025, and a 4 percent increase effective January 2026, citing material and construction costs, infrastructure projects and reserves. On November 17, 2026, the council will consider a proposed 2 percent increase that would take effect in January 2027 if approved. SVP says its rates would remain among the lowest in California for utilities with more than 10,000 customers. At SVP's current average of 18.2 cents, a 2 percent increase works out to less than half a cent per kilowatt-hour.

Policy is also under review. The Mercury News reported on October 7, 2026 that residents raised concerns about data centers' electricity use, their backup diesel generators and whether community benefits are adequate, and that the council unanimously directed staff to study changes to data-center regulations. If you're comparing a Santa Clara home with one in a neighboring city, that review and the November 17 vote both affect the electric bill that comes with the house.

Quick answers

Does a Santa Clara home get gas from Silicon Valley Power?

No. SVP provides electricity, and PG&E provides gas. The city also runs its own water and sewer utilities and contracts with Mission Trail for garbage service.

Is there a cheaper EV charging plan in Santa Clara?

SVP has no separate EV rate. Its standard residential time-of-use schedule already prices off-peak usage above 300 kilowatt-hours at $0.16023 in 2026.

Is the 2027 increase final?

No. As of publication, the 2 percent increase is still a proposal. The City Council takes it up on November 17, 2026.

Rebate amounts, net metering terms and rate schedules are set by the utility and can change. This post is general information, not legal, tax or financial advice, so check the current program rules with SVP and the right professional before you count on any figure.

If you're comparing a Santa Clara home with one in a neighboring city and want the energy costs included in that comparison, Julio Orozco can help you factor utility costs into your decision before you make an offer. Let's Connect.