Santa Clara, Calif.– October 31 , 2005 – Silicon Valley Power (SVP), the City of Santa Clara's municipal electric utility, has proposed a 5 percent increase in electricity rates, effective January 1, 2006, followed by another 5 percent on July 1, 2006. The new rate increase schedule will be introduced to Santa Clara City Council on November 1, 2005 for consideration and potential action on December 6 . These increases mark the first time in 13 years that SVP has raised rates, compared to PG&E whose rates have increased nearly 30 percent since 2000.

Although SVP's base rate has remained stable for 13 years, in 1998, deregulation created two new charges imposed by the State–public benefit and grid management charges.

During the energy crisis in which electric rates throughout California skyrocketed, SVP rates remained steady. Even with the increases, SVP rates will continue to be substantially lower than PG&E's and compete quite favorably with other California municipal electric utilities. In fact, the City of Santa Clara's combined utility rates will remain the lowest in the nine Bay Area counties.

For the last 20 years, SVP relied on a long-term, low-cost power contract with the Western Area Power Administration (WAPA) for about 40 percent of its power needs. Since the mid-1990s, SVP also managed to either cut or stabilize costs in several areas, especially by refinancing bonds when savings could be achieved with lower interest rates. These actions allowed the utility to keep rates constant even through the energy crisis of 2000-2001, which brought extreme cost volatility and rolling blackouts to other California communities. However, in January 2005, WAPA amended its long-term power contracts with utilities across the State, greatly reducing the availability of low-cost power to Santa Clara.

In filling the power gap created by the reduction in the WAPA energy contract, SVP sought control of its energy future on behalf of Santa Clara customers by building its new Donald Von Raesfeld power plant and fortifying the transmission lines coming into the City. Although Santa Clara has realized many benefits by owning its own local generation, the doubling of the price of natural gas for the new plant has made it impossible to offset all cost increases.

“Even though we never want to put financial pressure on our customers, the economic climate has made it impossible not to increase our electric rates,” said Junona Jonas, Santa Clara Electric Utility Director. “We are proud that we can ease the burden by offering residential and commercial energy audits, appliance and equipment rebates and financial assistance programs.”

About Silicon Valley Power

Silicon Valley Power is the trademark adopted for use by the century-old Electric Department of the City of Santa Clara, California. Silicon Valley Power provides power for more than 50,000 customers, including Intel, Applied Materials and National Semiconductor. It also is an active participant in the wholesale energy markets in the Western United States. Visit www.siliconvalleypower.com for more information.