Update on proposed solar power purchase agreement

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By Rebecca Bowe

The city’s Budget & Finance Committee voted 3 –2 this afternoon to table the discussion about the Recurrent Energy power purchase agreement until April 22.

The 25,000 solar panels that would be installed upon the roof of the Sunset Reservoir could generate enough power to serve 2,500 San Francisco households, Barbara Hale of the San Francisco Public Utilities Commission told the committee. It would increase the city’s solar generation from 2 to 7 megawatts, she said, and it would become California’s largest solar photovoltaic system. But while everyone applauded the idea of going solar, some supervisors said they weren't comfortable with the terms of the contract with Recurrent Energy.

Supervisor Ross Mirkarimi said he had a problem with the city cementing a 25-year agreement to pay $235 per megawatt-hour, a rate that will escalate at 3 percent per year, when there is uncertainty about how the renewable-energy market will behave. If the going rate for solar power drops significantly in the next two decades, he pointed out, the deal could leave San Francisco locked into paying a high price to a private company.

Barbara Hale, of the SFPUC, responded that she believed the contract was favorably priced, and said she wasn’t as optimistic that the price of solar power would drop.

Supervisor David Campos, meanwhile, expressed concern about a term in the proposed contract that would waive two provisions of the city code. The first provision makes the annual appropriation of funds for a multi-year contract subject to approval by the Board of Supervisors; the second requires that the city controller certify the maximum amount of a contract obligation. A decision not to waive these provisions would be a “dealbreaker” for Recurrent Energy, according to a Budget Analyst's report.

“It’s very, very unusual that the vendor in this case … is asking that we waive the Board of Supervisors’ appropriation authority, and not only that, but we remove the financial oversight that the controller provides that is called for in the code,” he said. “Those two provisions are in there to protect the taxpayers of the city and county of San Francisco.”

Supervisor John Avalos echoed the note of skepticism. “If it’s going to be owned and operated by a private entity, it’s not public power,” Avalos said.

Representatives from Arc Ecology, the Brightline Defense Project, and others advocating for green jobs urged the Budget & Finance Committee to move the project forward, saying it could provide much-needed employment. According to Hale, the solar-installation project would create 60 jobs. Most positions would last six months, but a handful would become permanent.