San Jose Clean Energy to amend battery-storage contract after transmission delays; price reduced, dates moved
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Summary
San Jose Clean Energy won council approval to amend its contract with NextEra’s Yellow Pine Solar 3 battery project after transmission upgrades delayed commercial operation dates; the amendment reduces price and extends commercial online dates to meet CPUC resource adequacy deadlines.
The San Jose City Council on March 4 authorized staff to amend an existing power purchase and storage services agreement with Yellow Pine Solar 3, a battery storage project developed by NextEra Energy Resources, to reflect multi-year transmission delays and a reduced fixed price over the contract term.
City energy staff said the amendment responds to transmission upgrades outside the developer’s control. The contract originally assumed commercial operation of the storage and tolling product in June 2025, but the upgrades pushed the tolling (charge/discharge) date to June 2027 and the resource-adequacy delivery date to June 2028. In exchange for the delay, the contract price will be reduced and remain fixed for the agreed term. The amendment also gives the developer the option to offer up to 40% additional volume to the city.
Zach Scribe, acting director of the city’s energy department, and Paul Anamorado, deputy director of power resources, told the council the project helps San Jose meet state resource adequacy and midterm reliability procurement mandates from the California Public Utilities Commission (CPUC). Anamorado said failing to procure required incremental capacity could result in the CPUC ordering the investor-owned utility to backstop procurement and allocate costs to the city, with potential penalties.
Under the amendment described to council, the facility’s term remains 20–23 years with no escalation in the fixed price. Staff identified a not-to-exceed annual contract cost of about $5.3 million and a lifetime maximum near $111 million under the amended terms; staff said the reduced price compared with the original agreement would offset some budgetary impact from the delivery delay.
Council approved the amendment unanimously. Energy staff noted the transmission upgrades — located in utilities operated by Southern California Edison and the Los Angeles Department of Water and Power — affect multiple projects in addition to Yellow Pine 3, and they are working with the developer and policymakers to prioritize timely completion.
What happens next: staff will execute the amendment with NextEra/Yellow Pine Solar 3, monitor the coordinating transmission work, and report back as required by contractual milestones and CPUC compliance timelines.
