California neighbors blocks apart may pay $180 or $410 for the same electricity use

"Start with the free fixes first, and don’t assume a battery will bring you down to Santa Clara-level bills."

Two similar homes only a few blocks apart in Santa Clara and San Jose can end up with very different electricity bills, depending on which utility provides service.

In a hypothetical comparison, local real estate agent Steve Mun (@Stevemungroup) said the monthly cost could be about $180 in Santa Clara and $410 in San Jose.

What to know

Most San Jose homes get electricity delivery from investor-owned PG&E, while Santa Clara runs its own municipal utility, Silicon Valley Power, Mun said in a YouTube video.

His example used two families living in similar 1,500-square-foot houses, each with central air conditioning and nightly electric vehicle charging.

The $230 monthly difference would amount to $2,760 a year. Mun made clear that the comparison was illustrative, not a record of two actual households’ bills.

He also said PG&E must serve a much larger area, including regions exposed to wildfire risk. Santa Clara’s lower costs, he added, also reflect the fact that its utility does not have to produce profits for investors.

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PG&E delivery charges are still part of the electricity cost for service provided through San Jose Clean Energy. Mun said those charges make up about two-thirds of the bill, which limits how much the city program can narrow the gap.

More background

Running data center servers requires large amounts of electricity. Mun said the city has 58 data centers, with two more under development.

Based on city planning documents, he said expected demand could rise to nearly triple the current peak, which would require new high-voltage power lines. He also pointed to back-to-back Silicon Valley Power rate increases of 5% and 4%, which the city attributed to construction costs and grid upgrades.

For would-be buyers, power costs can affect affordability without necessarily changing a home’s value. Mun estimated that $230 in monthly savings is roughly equal to the payment on about $35,000 to $40,000 in additional borrowing at around 7% interest.

He said cheaper electricity matters less than location, commute time and school quality, and that he would not advise paying an extra $50,000 for a property just to get lower utility bills.

What can be done?

Mun recommended asking for 12 months of electricity bills before making an offer, with special attention to summer usage. Buyers near the Santa Clara-San Jose border should confirm the utility provider instead of assuming which company serves the home.

For San Jose households, he suggested shifting dishwasher use, laundry and electric vehicle charging outside the expensive 4-9 p.m. period. He also recommended contacting PG&E about a rate plan that fits the household and pre-cooling the home before peak pricing begins.

Solar panels and batteries can also change a property’s costs. Mun warned that a Powerwall-sized battery can cost well above $10,000 installed, so backup power should be considered separately from possible bill savings. Those systems can require a major investment.

For sellers, he advised including Santa Clara electricity bills in disclosure packets and mentioning any installed solar or battery systems in listings.

"Start with the free fixes first, and don’t expect a battery to get you down to Santa Clara bills," Mun said. "It won’t unless you have multiple EVs and just run electricity all day long."

Where can I learn more?

The Santa Clara-San Jose gap is only one example of how electricity prices differ across California.

• A Bay Area renter’s non-PG&E electricity rate of $0.14 per kilowatt-hour drew attention.

• California’s electricity costs are the second-highest in the country, and energy policy is often blamed.

• One California solar owner compared 29 electricity rate plans and found only 1% in possible savings.

• A California tenant said lost solar credits pushed monthly bills from $75 to more than $200.