2024 CEO letter

As I reflect on what SMUD accomplished in 2024, I’m proud of how we rallied the enterprise and the industry toward positive results, significant accomplishments and tangible progress on our 2030 Zero Carbon Plan. We progressed down a viable path to eliminating carbon in our power supply, with advanced, cutting-edge clean energy projects and technologies. We also fostered innovation and new partnerships while maintaining our commitment to world-class reliability, safety, low rates and equity.  

We achieved significant milestones this year, including: 

  • Adding nearly 300 megawatts of renewable and energy storage capacity since 2021, with 3,100 megawatts in total resources by 2030 either complete, signed or under evaluation. 
  • Having 1,520 megawatts of new, carbon-free projects commissioned or signed to be online by 2028. 
  • Evaluating another 1,415 megawatts of new carbon-free projects in the pipeline. 
  • Purchased significant renewables to meet California’s  Renewable Portfolio Standard in the latest compliance period 2021-2024, ending with 44% in 2024.
  • Reaching 78% carbon-free energy in our power supply in 2023. When you include our customer programs, we’re at 80%. A strong hydro year in 2023 significantly contributed to this great outcome. 
  • Maintaining rates that are among the lowest in California and 50% below neighboring PG&E. 

We solidified our reputation as a national authority in how to decarbonize aggressively, while bringing our community right along with us. This annual report showcases some of our major accomplishments, grouped by strategic priorities. Here are some highlights.

Safety & Reliability

With our continued focus on Safety for Life at SMUD, we saw a 61% decrease in the amount of time injured employees spent away from their normal job duties, thanks to providing early intervention to catch potential safety concerns before they become injuries. We also made major progress on projects that support load growth and grid reliability—like the design of Station J, a new substation that will add capacity for the Railyards, a new hospital and other downtown Sacramento facilities.

Updated reliability studies confirm that when our Country Acres solar and storage project comes online in 2027, it can replace our McClellan and Campbell thermal plants during normal operations. We’re also working on retooling Cosumnes Power Plant to be more flexible, resulting in less emissions. Evaluation of similar projects at our Carson and Proctor thermal plants is under way.

Environmental Leadership

While proven clean technology can get us up to 90% of the way to our goal, new technologies and innovative projects like carbon capture and sequestration (CCS), battery storage and new customer programs such as Virtual Power Plants can help us close the remaining 10%. We continue to develop the next wave of customer programs and work with Calpine on a proposed Sutter CCS project agreement, aiming to present a power purchase agreement (PPA) by mid-2026 for Board consideration, with a potential to be online in 2029. 

Community Vitality

As a community-owned, not-for-profit utility, customers and community remain at the heart of all we do. 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, resulting in 20,000 pounds of food donated to the Elk Grove Food Bank. 

Affordability

To offset costs and accelerate planned projects, we implemented our grant strategy and, with our partners, attracted $90 million in grants for our region in 2024. We have expanded our financial strength and focused on Operational Excellence, saving the enterprise $50 million through one-time and ongoing expenses. SMUD rates continue to be among the lowest in California, and more than 50% lower than our neighboring investor-owned utility.

Organizational Agility

Our 2030 Zero Carbon Plan remains a flexible roadmap. We updated our employment strategy in 2024 and grew our talent pipelines – we will continue enhancing the candidate experience. Flexibility and agility are essential as we work toward our goals while prioritizing reliability and affordability. 

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.  

 

Sincerely,

Paul Lau
CEO & General Manager