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.

Comments

How To Get -True- Public Solar At Sunset Reservoir -

Here is the response that I sent to the Budget Committee on their wise decision to hold off on the private solar plan for Sunset Reservoir.

Hi Supervisors and staff,

I was very happy to see you opt for strong caution today on the SFPUC's proposed power purchasing agreement with Recurrent.

Here's a really easy way to simplify the discussion.

One the one hand, The SFPUC staff are asking you to lock the City into a 7 to 25 year contract with a private company to purchase solar energy at high solar rates, with only an option, and only in the seventh year, to buy the facility and make it public power.

On the other hand, Clean Power SF (Community Choice), can, on the same schedule, put the same 5 megawatts of solar panels on the very same reservoir at the same or lower rates than current PG&E fossil fuel power; and with -guaranteed- public ownership of the facility.

Clean Power SF is a carefully designed mix of solar, wind, and efficiency projects harmonized together. Because the wind and efficiency bring in rapid profits and savings, they pay the higher up front cost of solar (until the solar pays itself off over time and starts bringing in its -own- free energy); thereby allowing the entire project to easily balance out to meet or beat PG&E rates.

So we can get that identical 5 megawatts of solar at rock bottom prices, and with a much better prospect for local hiring, because City bonds will be paying for it.

So why does the SFPUC staff want us to contract one corporate job at a time for expensive stand alone solar, with private corporations nickel-and-diming us, asking us to wave government oversight, and likely playing a lot of predictable games with us on local hiring? This makes no fiscal or civic sense whatsoever.

This proposed Recurrent power purchasing agreement reminds me a lot more of the Comcast deal, than any real progress toward true renewable public power...

Posted by Eric Brooks on Mar. 18, 2009 @ 7:39 pm

Slight clarification, Rebecca. Brightline advocated creating 5 MW of solar power at the Sunset Reservoir under the best terms available to the City, whether that is through City ownership at the outset or a power purchase agreement.

We requested that as the Board takes time to make that determination, the SFPUC should revisit the proposed deal's local hiring provisions. As it stands, environmental justice will not be served because the proposed language will not create any green jobs for economically disadvantaged individuals that have historically borne the burden of power plant pollution.

These are the communities that are most hungry for jobs and most eager to participate in the greening of our City. They must be included in this project, under whatever iteration it ends up taking.

In addition, most green job creation among underserved communities under the City's solar efforts to date has occurred in zip codes 94112, 94117, and 94124. One idea is to implement a policy mandating a certain portion of hiring from neighborhoods in these and other underserved zip codes, much like has occurred in the successful community partnership at the Pier 96 Recycling Facility.

Joshua Arce
Brightline Defense Project

Posted by Joshua Arce on Mar. 18, 2009 @ 3:05 pm

Focus,

Bottom line on this thing is that Newsom wants to hand over a huge piece of City property for $1. Sound familiar? That's also their 'selling' price for Harding Golf course after spending over 25 million to put it out of the price range of normal resident hackers.

This one is even worse because not only do they want to give away this vital property, they want the City to guarantee the bandits a couple of million a year.

Guaranteed hiring of City residents? Don't make me laugh. See the owner of Yoshi's in front of the Budget committee last week? His name is Yaz and he took 5.3 million bucks from the City to build a club here. Part of the deal was that he hire local residents.

Well, he baaarrreely did. Something like 10% and when asked about it, he did two things.

First, he scoffed at the idea of hiring locals desperate for work. His comment: "I'm not running a school.".

Secondly? He asked for another 1.3 million bucks and got it from the Muni Substation project.

And, oh. He's never made a single payment on his original loan.

The City rewards greed and racism. The more blatant (see Lennar), the more money you get.

h.

Posted by h. brown on Mar. 19, 2009 @ 7:55 am