Tesla proposes deal to help Palo Alto upgrade SRP’s electric infrastructure

Tesla has proposed to help Palo Alto upgrade the Standford Research Park’s (SRP) electric infrastructure. 

In 2023, Palo Alto officials set their sights on improving the city’s electric infrastructure to become carbon neutral by 2030. Tesla has submitted a proposal to the city that may speed up a part of the project. 

Tesla proposes to help the city rebuild a substation at 3350 Hanover St near Page Mill Road, where the automaker plans to build its new engineering headquarters. Tesla’s new engineering HQ is part of Palo Alto’s Stanford Research Park, which has been home to many influential tech companies since 1951. The car manufacturer’s proposal would upgrade SRP power lines and knock out a big chunk of Palo Alto’s electric infrastructure goal.

Tesla proposes splitting the $24 million cost of the new substation for the SRP area, meaning each party would contribute $12 million to the project. Tesla is also paying extra to expedite the project.

The substation upgrade is expected to help other customers in the area, not just Tesla. Palo Alto’s Assistant Director of Utilities, Tomm Marshall, noted that existing transformers were “undersized relative to the needs of customers in the SRP, require a higher-than-normal level of maintenance, and are nearing or past their useful lives of 50 years.” 

Under the proposed deal, Tesla contractors plan to replace two 4-kilovolt (kV) transformers at the substation with 12 kV transformers. The company will also install three substation breakers, a power distribution center, and two 12 kV feeders. 

The deal also states that Tesla will pay a monthly fee to the city to reserve up to 11,200 kVA of capacity for its needs. Palo Alto will need to spend an additional $3 million to transfer feeders that do not serve Tesla, bringing its total costs on the project up to $15 million. 

Background

Palo Alto is leaning heavily into electrification, even encouraging developers to make new all-electric buildings run by renewable energy. 

In a presentation on June 7, 2023, Palo Alto’s Marshall laid out the plans for the transition. Palo Alto’s electric infrastructure initiative started with a trial upgrade project in the Leland Manor area.

After the trial project, Marshall stated that the department would work on neighborhoods with overhead electrical lines by replacing transformers and upgrading second systems and residential circuits. Then, the city planned to upgrade underground systems. 

After dealing with underground systems, Palo Alto Utilities wanted to upgrade substations and circuits. Tesla’s proposal has changed the city’s electrification plans and expediting parts of it. 

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