On Tuesday, October 6, the Santa Clara City Council will receive an update on the City’s comprehensive approach to managing future data center development, including electric reliability, water use, siting and design, community benefits, and emerging sustainability technologies.
As communities across the country consider the rapid growth of data centers and artificial intelligence, it is important to distinguish that Santa Clara is unique and has decades of experience managing this important part of the Silicon Valley economy.
Silicon Valley Power (SVP), the City-owned electric utility, has served data centers since 1996, when the world’s first modern data center was built in Santa Clara. Since then, data centers have become an important contributor to our local economy. In FY 2025/26, data centers contributed $35 million to the City of Santa Clara’s General Fund from sales and use taxes, property tax, and a 5% voter-approved electric utility General Fund Transfer.
“Data centers have been part of Santa Clara and Silicon Valley’s technology landscape for decades,” said City Manager Jovan D. Grogan. “We have thoughtfully managed growth. Many in the community are not aware that Silicon Valley Power stopped accepting new data center requests in 2023. This was in response to receiving more requests than we could accommodate and to allow for the completion of an ongoing capital program to position the utility for continued success. The pause in electrical load applications for new data centers remains in effect, and the City is using this opportunity to revamp the review process for any future data centers.”
Additional information on the City’s efforts to maintain reliable and affordable electric service for residents and businesses, modernize Silicon Valley Power’s infrastructure, and ensure new development advances the City’s environmental sustainability goals is available in the staff report for Tuesday’s meeting.
Below is a brief comparison of Santa Clara’s electric rates to other utility providers.
Managing Electric Rates
In compliance with California’s cost-of-service rules, large customers pay for the electricity they use and, through the City’s Load Development Fee, for the infrastructure upgrades needed to serve their added demand. Residents do not pay for infrastructure built to serve that growth. Additionally, 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.
SVP residential rates are among the lowest in the State of California, lower than the national average, and significantly lower than PG&E.
The City of Santa Clara remains fully committed to providing reliable, affordable, and clean electric service for Santa Clara’s residents and businesses, while meeting existing customer commitments and investing in the infrastructure necessary to support the City’s long-term electric needs.