CEO letter

Reflecting on SMUD’s work in 2025, I’m proud of how we continued to flexibly lead our organization and industry forward, all while supporting the people we serve. We made significant strides with our 2030 Zero Carbon Plan, while maintaining strong financial health and demonstrating the agility necessary to continue to improve the quality of life for our customers and community. These accomplishments, along with our continued efforts to foster innovation, create new partnerships and maintain our commitment to world-class reliability, safety and affordability, position SMUD to be a leader at home and beyond for decades to come. When I retire from SMUD later this year, I do so confident that SMUD is in a strong position to deliver on its purpose and mission.

In 2025, we achieved significant milestones:

  • Adding about 340 MW of new renewable and storage capacity since initiating our 2030 Zero Carbon Plan in 2021, with an additional 1,090 MW signed under power purchase agreement to come online between 2026-2030 and thousands more clean energy megawatts under evaluation including the Calpine Sutter Decarbonization Carbon Capture project.
  • Celebrating the official opening of our Sloughhouse Agrivoltaics Solar project — a 50 MW solar facility generating enough clean, affordable energy to power more than 12,000 homes in the Sacramento area.
  • Breaking ground at our Country Acres Solar (344 MW) and Battery Storage (172 MW) project — our largest solar and storage project yet and a critical addition to our clean energy infrastructure.
  • Actively evaluating emerging technologies and new market opportunities, such as the Extended Day-Ahead Market (EDAM) to enhance grid efficiency and keep rates affordable for our customers.
  • Becoming the first municipal electric utility in the nation to issue Green Commercial Paper — a short-term financing tool that supports our 2030 Zero Carbon Plan and broader clean energy goals. This groundbreaking move was part of a comprehensive financing strategy that also included a $300 million bond issuance. 
  • Making Operational Excellence (OpEx) savings a top priority as we worked toward improving efficiency and streamlining our processes to focus on the most strategic work for our customers and community, saving $55 million in the process.
  • Continuing to maintain rates among the lowest in California and 50% below our neighboring utility, saving our community nearly $1.8 billion a year.

We had many significant accomplishments across our strategic priority areas — Safety & Reliability, Environmental Leadership, Community Vitality, Affordability and Organizational Agility.

Safety & Reliability

In 2025, we made strong strides in safety, exceeding our goal for employee-supervisor interactions by 40% to help reduce workplace incidents. We upgraded critical infrastructure, replacing 210,000 circuit-feet of cable and 700+ poles, trimming 97,000 trees, and made major progress on 5 transmission substation projects. Innovation remained a priority as we deployed the ANYmal robot dog to support substation maintenance and installed 500 solar-powered monitoring devices to detect outages early, further strengthening grid reliability for our community.

Environmental Leadership

Making major strides toward our bold vision of a carbon-free future, we achieved significant reductions in greenhouse gas emissions, enhanced operational flexibility and $10 million annual fuel savings through our Cosumnes Power Plant turndown project, as well as the addition of 50 MW from our Sloughhouse solar project.

Our innovative customer programs exceeded enrollment goals, delivering more than 1,800 all-electric homes through our Smart Homes program, and supporting over 400 commercial electrification projects. Clean transportation continued to grow, with 7,000 new EV rate customers, 650 commercial charging incentives and SMUD’s fleet now driving 29,000 zero-emission miles monthly — a 107% increase over 2024. We remain committed to advancing renewable and storage solutions as we lead the charge to a sustainable energy future.

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. This includes supporting energy efficiency and electrification work through our Community Impact Plan, Meadowview electrification project, launching the Solar and Storage for Nonprofits program and hosting thousands of community events and 10 marquee regional STEM events. Our overall 97% Customer Satisfaction rating for the year demonstrates our continued efforts to deliver on the evolving expectations of our customers.

Affordability

To offset costs and accelerate planned projects, we implemented our grant strategy and, with our partners, were awarded $42 million in grant funding including $25.5 million from the California Energy Reliability and Resilience Infrastructure (CERRI) grant from the Department of Energy and California Energy Commission (CEC). SMUD rates continue to be among the lowest in California — about 50% lower than those of our neighboring investor-owned utility, keeping over $1.8 billion in our community.

Organizational Agility

In 2025, we advanced efforts inspired by our latest employee engagement survey, with improvements in team-level engagement and procurement and performance management processes. Our “I am SMUD” campaign highlighted employees’ diverse backgrounds and their contributions to a culture of inclusion and belonging. Workforce training programs continued to grow, and we invested heavily in new technologies, especially AI, to strengthen employee skills, operational efficiency and organizational security. We engaged over 1,000 employees through the activities and outreach of our 10 Employee Resource Groups. These activities help to foster a culture of trust and inclusion throughout SMUD.

In 2025, we solidified our reputation as a national authority on how to decarbonize aggressively while never losing sight of our purpose. I’m beyond proud to share our achievements in this annual report. It’s been the honor of my lifetime to lead SMUD and to serve our community for more than 4 decades. I truly believe SMUD is well positioned to continue to lead the utility industry and our region for decades to come and I look forward to seeing the accomplishments of the next era of leadership! 

Sincerely,

Paul Lau
CEO & General Manager