San Diego Community Power Resource Adequacy Trade.

The City of San José will enter into two 10-year agreements with San Diego Community Power (SDCP) to comply with California Public Utilities Commission (CPUC) resource adequacy requirements.

Purchase Agreement: San José Clean Energy (SJCE) will purchase resource adequacy from a new solar plus battery storage facility for an annual not-to-exceed amount of $4,320,000, totaling $43,200,000 over the contract term. This resource is expected to be operational by January 1, 2029.

Sale Agreement: SJCE will sell resource adequacy from an existing natural gas-fired combined cycle generating facility to SDCP for an annual not-to-exceed amount of $4,770,000, totaling $47,700,000 over the contract term. This agreement also begins no later than January 1, 2029.

These agreements are designed to be a cost-effective method for both agencies to meet CPUC mandates, which require load-serving entities to procure sufficient power resources, including new renewable or zero-carbon emitting resources and energy storage. The structure allows SJCE to realize a modest net revenue due to the greater hourly value of natural gas resource adequacy compared to solar plus storage. Funding for these agreements will be sought in future budget processes, beginning with the 2027-2028 Proposed Operating Budget, and will be paid from the San José Clean Energy Operating Fund.