2023 CEO Letter

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SMUD CEO and General Manager, Paul Lau

As I reflect on what SMUD accomplished in 2023, I’m honored to lead such a dynamic organization, and am proud to present a collection of our achievements and progress toward our bold 2030 zero carbon goal in this Annual Report.

2023 was a year of transformative milestones, marked by bold action and momentum propelling us toward a clean energy future. 2023 also cemented SMUD’s position as an innovative leader and the authority on how to decarbonize reliably, affordably, safely and equitably.

The year started with a series of historic storms and hurricane force winds, causing the most significant damage to our system of any storm in modern history. Hundreds of trees fell, 1,800 lines were downed, and 425 power poles had to be replaced.   

While about 599,000 customers were impacted by power outages, Team SMUD worked around the clock to quickly respond to the storms, supported our customers and community and worked safely to repair the damage until all power was restored.

All year long, we implemented holistic storm response enhancements designed to manage extreme weather events like these, which are now more frequent due to climate change.

Across SMUD, we’re focused on tackling the climate crisis. We know proven clean technology will get us 90% of the way to our goal of eliminating carbon emissions from our power supply by 2030, and we moved forward  in 2023. We made significant progress on new renewable and battery storage projects and partnerships, leveraging innovation and techology. We started construction of our 85.5 MW Solano 4 Wind Project, significantly expanding output at this clean energy resource, and with the addition of the 172 MW 4-hour battery Country Acres Solar & Battery Storage project.  Through our grant partnership with Calpine Corporation for our carbon capture and sequestration project and our partnership with Energy Storage Systems (ESS) on Long-Duration Energy Storage, we’re leaving no stone unturned.

Meanwhile, we continued our focus on financial stewardship, staying true to our commitment to keeping our rates low, among the lowest in California. In fact, our rates are more than 50% lower than our neighboring investor-owned utility. This keeps about $2 billion in our local economy each year. And, we’re bringing all communities along on the journey to zero through our Community Impact Plan.

As a community-owned not-for-profit utility in our transition to a clean energy future, we continued to engage the community through our STEM education, workforce development and other engagement and outreach efforts. We supported over 1,300 community events, from SMUD’s solar car races and clean energy workforce development programs to flagship events like the California State Fair, which resulted in 20,000 pounds of food donated to the Elk Grove Food Bank.

2023 was full of significant accomplishments:

We continued our progress in delivering on our 2030 Zero Carbon Plan, including significant outreach, customer engagement, securing new clean energy resources and extensive studies to ensure continued world-class reliability to support the most aggressive carbon reduction goal of any large utility in the United States. Here are highlights in specific areas.

Clean Technology and Renewable Energy

  • Installed 6 ESS batteries as part of Phase 1 of our iron-flow, long-duration battery storage project at our Sacramento Power Academy, which is our training center for utility workers. This helps create workforce development opportunities – a key in bringing our community along in the transition to a clean-energy future.
  • Executed a Power Purchase Agreement for our 344 megawatts of solar and storage with our Country Acres project – our largest planned solar and storage project. 
  • Partnered on Calpine’s $270 million grant application to the U.S. Department of Energy for a Carbon Capture and Sequestration project at the existing Calpine-owned natural gas plant, Sutter Energy Center, following extensive community outreach about the proposed project. When built, the project will reduce over 1.5 million metric tons of greenhouse gas emissions annually.
  • Secured 5 grant opportunities for $53.5 million for SMUD and $1.3 million for partners in Sacramento. Including:
    • $50 million from the U.S. Department of Energy Grid Deployment’s Grid Resilience and Innovative Partnerships program for SMUD’s Connected Clean Power City application. This effort will help accelerate several technology-enhancing projects and other new technologies that support our clean energy transition.
    • $2.9 million from the California Energy Commission through its FAST Grant to enable modernization of DC Fast chargers at the Airport and Amtrak, along with supporting SMUD’s development of a charging app to enable a common payment platform and potentially enable things like subscription rates.
  • Showcased SMUD’s global leadership in equitable clean energy solutions at international and national conferences with a focus on electric transportation, clean energy technology, grid resiliency and more.

Customers and community

  • Implemented our Community Impact Plan, with more than 250 neighborhood electrification measures installed, 493 people participating in clean energy workforce training programs and more than 30 unique translated marketing materials supporting the affordability, equitable access and engagement of our under-resourced communities.
  • Met customers where they’re at and supporting small businesses with energy efficiency, electrification and other energy and cost-saving measures.
  • Completed multi-family electrification retrofits, including at Sacramento Manor’s affordable senior housing complex. 
  • Focused on STEM education and youth leadership opportunities to help develop a skilled and diverse local workforce to ensure the green-jobs sector thrives.
  • Provided all-electric solutions to local Habitat for Humanity homes.   
  • Launched new Virtual Power Plant programs – including My Energy Optimizer® and Peak Conserve℠ – to compensate customers for sharing their distributed energy resources.

Electric transportation

  • Expanded our local EV charging infrastructure through Sacramento Regional Transit’s Power Inn high-speed charging station.
  • Made EVs more accessible in a historically under-resourced community through the Del Paso Heights Mobility Hub.
  • Launched our “Contact SMUD first” campaign to offer customers tailored advice on all things EV – from purchasing and charging options to our EV discount rate.
  • Launched a managed charging EV pilot for Ford, BMW, GM, VW and Tesla drivers.

Employees

  • Made progress on implementing our Diversity, Equity, Inclusion & Belonging (DEIB) Strategy, through an Inclusive Culture Plan, work of our employee DEIB Council, supporting our Employee Resource Groups and using new technology to support recruiting diverse talent.
  • A total of 8 ERGs were active throughout the year in engaging and educating employees, partnering with community groups and creating an inclusive culture.
  • Through our SMUD Cares employee giving campaign, employees personally donated over 2,600+ hours of service and gave $421,500 to local nonprofits.

Reliability

  • Completed a 5-year wildfire risk reduction project in the Upper American River Project a year ahead of schedule.
  • Ongoing work to ensure reliability by trimming more than 95,000 trees, replacing over 1,200 poles and replacing more than 250,000 feet of underground cable.
  • Powered up Station G, a state-of-the-art substation serving downtown Sacramento.

2023 was an exceptional year for SMUD thanks to the dedication, innovation and hard work of our employees. We made bold strides toward our zero-carbon goal in 2023, while delivering on our purpose to improve the quality of life for all our customers and community. Each bold step forward brings us closer to a clean and equitable energy future for all.

Sincerely,

Paul Lau
CEO & General Manager