Fremont council approves LS Power franchise for 'Power South Bay,' citing grid capacity and local benefits

Fremont’s City Council on Tuesday approved a franchise agreement with LS Power to allow construction of the Power South Bay transmission project through the city, a staff-backed deal officials said will increase regional grid capacity, underground visual impacts and provide local community benefits.

The project will install roughly 200 kilovolts of bidirectional transmission and about 12 miles of line overall, with approximately six miles located in Fremont and undergrounded along Fremont Boulevard, Cushing Parkway and Boyce Road, assistant city engineer Noe Veloso told the council during a staff presentation (Noe Veloso, Assistant City Engineer). Veloso said construction is expected to begin this summer and conclude in 2028.

Donovan Lazaro, Fremont’s economic development director, said LS Power agreed to underground the entire local length and to install about six miles of fiber optic broadband, "and actually dedicating it to the city upon completion of the project free of charge." He added the developer will provide an upfront payment of roughly $2.5 million that can be used toward the Central Park Community Center.

LS Power’s senior vice president, Casey Carroll, estimated the city’s first full-year franchise payment would be in the $500,000–$750,000 range and described the franchise fee as a recurring revenue stream for Fremont. Carroll also explained that gross transmission revenues typically decline modestly over time because of depreciation, but noted capital improvements and replacements can offset that trend.

Council members pressed staff on local benefits and impacts. Council member Sharp asked whether Fremont would gain a local "exit" or off-ramp from the transmission; staff said Fremont functions as a node and will receive direct and indirect capacity benefits, including strengthened service to local substations. Vice Mayor Singh raised questions about rate impacts to residents; staff explained CAISO-funded projects are paid for through a statewide line item on utility bills and that the project’s financing and rate impacts are overseen by state regulators.

A public speaker, Kelly April, criticized the project as primarily intended to serve growth in neighboring San Jose and questioned whether Fremont’s long-term local tax benefits would be substantial. City staff and LS Power responded with technical explanations of the project’s design, the choice of alternating-current transmission for this segment and regulatory oversight by the California Public Utilities Commission.

The council voted to approve the franchise ordinance 6–0 with one absent (Council member King). The ordinance sets an initial 10-year franchise term with automatic renewals for successive 10-year terms up to 40 years and establishes a franchise fee estimated at about 2%–2.3% of gross revenues, subject to the contract terms.

With the vote complete, city staff said LS Power will proceed with construction coordination and a stakeholder communications plan designed to minimize disruption along the project corridor.