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Recurrent Energy Solar Contract
Heading Back to Committee?

Written by Luke Thomas. Posted in News, Politics

Published on May 11, 2009 with 15 Comments

By Luke Thomas

May 11, 2009

A proposal by Recurrent Energy to build a 5-megawatt solar energy-generating voltaic array on the Sunset Reservoir in San Francisco may be heading back to committee for further review and analysis, a Fog City Journal inquiry has revealed.

Supervisor Eric Mar, who cast his vote in support of the project contract during its first reading before the Board of Supervisors last Tuesday, told FCJ today he has received new information that suggests the City and County and San Francisco could improve the terms of the contract.

Mar said he has received “first and second hand information” from two solar companies since last week’s Board of Supervisors meeting which advised him: “The contract may not be as good as it could be.”


Supervisor Eric Mar

One of those companies, Enxco, had its bid for the solar project rejected “due to technical specifications,” according to Supervisor Chris Daly.

As the deal stands presently, the City and County of San Francisco would be locked into a 25-year contract and would be required to pay Recurrent Energy $235 per megawatt-hour of energy generated. Though the City would have a buyout option at years seven and fifteen, the buyout price is currently set at $33 million, or fair market value – whichever is higher.

Mar said new information has prompted him to discuss the possibility of “sweetening” the terms of the Recurrent Energy contract with San Francisco Public Utilities Commission General Manager Ed Harrington.

“I’ve asked Ed Harrington for information about the profit margin of [Recurrent Energy], also about other bids for the contract,” Mar said.

“Hearing some numbers from Enxco helped,” he said, “but I’m trying to verify if they’re legitimate and valid and I’m asking Ed Harrington more directly what could be done to improve the contract.”

Harrington, who spoke with FCJ to discuss the cost of the project, said: “The contract is expensive. Solar is expensive.”

“Solar will get cheaper,” Harrington added, “If they want to wait ten years, solar will be cheaper, but do you want to wait that long?”


SFPUC General Manager Ed Harrington

Adding to a growing opposition to the terms of the contract, Supervisor John Avalos, who voted against the agreement last week, said the deal “should be rejected outright,” adding that he would prefer to see a public power installation instead.

Avalos said the estimated $1.8 million per year the City would pay Recurrent Energy for the solar energy it produces could be used instead to incrementally purchase increasingly more energy-efficient solar voltaic panels with longer life spans, at lower unit prices than available today.


Supervisor John Avalos

“It will be an interesting debate,” said Board of Supervisors President David Chiu, who cast his vote in support of the project last week after his support of several contractual amendments from Supervisor Ross Mirkarimi failed.

“If people are having second thoughts, I’m open to discussing that,” Chiu said.


Supervisor David Chiu

A motion to send the item back to committee, or to reject the contract outright, requires a simple majority of six votes on the eleven-member Board.

Luke Thomas

Luke Thomas

Luke Thomas is former software developer and computer consultant who proudly hails from London, England. In 2001, Thomas took a yearlong sabbatical to travel and develop a photographic portfolio. Upon his return to the US, Thomas studied photojournalism to pursue a career in journalism. In 2004, Thomas worked for several neighborhood newspapers in San Francisco before accepting a partnership agreement with the SanFranciscoSentinel.com, a news website formerly covering local, state and national politics. In September 2006, Thomas launched FogCityJournal.com. The BBC, CNN, ABC, NBC, CBS, Fox News, New York Times, Der Spiegel, San Francisco Chronicle, San Francisco Magazine, 7x7, San Francisco Examiner, San Francisco Bay Guardian and the San Francisco Weekly, among other publications and news outlets, has published his work. Thomas is a member of the Freelance Unit of the Pacific Media Workers Guild, TNG-CWA Local 39521.

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  • http://www.fogcityjournal.com/profiles/profile_h_brown.shtml Harold Brown

    PG&E thwarted?

    That doesn’t happen very often. Joshua Arce has agreed to meet me in front of Board Chambers (OK, I invited him when he bitched about my comments and he hasn’t responded) … anyway, I invited Joshua to meet me in front of Board Chambers at 1:45pm tomorrow and defend his lobbying effort on behalf of Recurrent. On camera. That ‘misdirected’ check to Joshua’s company from PG&E is still stuck in my craw.

    h.

  • Joshua Arce

    Hey dude

    I already wrote back to you, saying let’s go get a beer and a taco at the taqueria we met at before. And I don’t know that I was bitching at you so much as just making sure that you accurately quoted the Guardian’s story about how we rejected PG&E’s offer of grant funding to Brightline.

    Let me say it like this: I want to see green jobs for economically disadvantaged San Franciscans. I want to see people of color, limited English speakers, women, and the formerly incarcerated installing solar panels. A host of community-based organizations have carved out a 30% minimum community hiring requirement on this project, to be drawn from the City’s 8 most disadvantaged zip codes, which we hope to apply to future projects. This will be especially effective in cases when utilities and private companies think they can ignore the communites that we want to empower.

    Show me a way to re-route the project ASAP to a way that the City can build the project outright and I’m with you brother, I’ll even buy our next burritos. I just don’t see a mandate from the public to kill the project outright, but instead to make the best deal we can on behalf of the City. Let’s do that as soon as possible.

    j.

  • http://www.fogcityjournal.com/profiles/profile_h_brown.shtml Harold Brown

    Mr. Arce,

    Yes, I have watched you attempt to position yourself as the Lawrence of Arabia of the Bay View and it don’t fly. Show up tomorrow at 1:45pm and let’s get you on film.

    h.

  • Jerry Jarvis

    The city could own it right out through revenue bond purchase. There is a need for the Obama administration to spend monies on solar energy. And as far as tax credits go the company that is hired to build the plant will still get the credits even though the plant will be owned by the city.

  • marc

    The City needs to reserve its precious publicly owned sunscape to buy into solar incrementally as technologies evolve, and the Board of Supervisors needs to direct Ed Harrington and the PUC to do it under the auspices of Community Choice Aggregation. We’ve had the Prop H and I bonding authority for almost a decade now, and the only reason why it is not being used is PUC intransigence.

    Whenever you hear economically conservative corporate hacks like Ed Harrington urging us to rush into deals like this, reach first for your wallet, because that’s where they’re going to stick you first, and then grab your nonviolent political equivalent of a revolver, because we’re going to need everything we’ve got to fight off this crowd.

    Just like the Building and Construction trades 18 month jobs are minimal when compared to the 50 or 100 year lifespan of a building system, rushing into contracts like this which perpetuate the privatization of a public utility ASAP leverages expedience for a long term good deal.

    The Sierra Club needs to get into solidarity with social justice progressives on this one, because how we get to green power is as important as generating green power. Properly handled, this is the perfect opportunity to pivot the discussion and compel the PUC to implement CCA and run solar out of that.

    Enviro nonprofits cannot maintain their legitimacy by siding with corporate utilities to create a false sense of immediacy that brings minor energy benefits with long term political and economic headaches.

    -marc

  • http://thepriceofuranium.com Ann Garrison

    Public power. Solar power that impoverishes people for profit is not sustainable.

  • Jerry Schwartz

    Interesting how H Brown is putting it up to Joshua Arce. There may be a touch of jealousy there. We all know that Brown runs in every election and stands for nothing. On the other hand, Joshua Arce has sucessfully lobbied on the Potrero Power plant. However, one weakness on Arce’s position is that in the communications he sent out, he neglected to say that Ross Mirkarimi opposed the Recurrent deal. Communication should always be open and honest. He should have explained how a member of the Green party (and Sierra Club Members) viewed the situation differently. Maybe this lapse was caused by being tainted after he shared a beer with Brown. Or he is positioning to run for office. Either way, he undermined himself and Brightline. Looking forward to the face off today. Please place on YouTube.

  • brookse32

    Actually, Jerry, the unfortunate truth is that most Sierra Club reps are supporting, not opposing the Recurrent deal. In their eyes, a quick private deal for 5 megawatts is better than no megawatts in the next year.

    But this is short term thinking. Supporting a for profit, high priced stand alone solar project in which the cost is unnecessarily amplified by the need to spread that high up front cost of solar over a 25 year pay back period, is wasting critical money that could be spent to build a much better amortized citywide mix of wind, efficiency and solar which will be paid off much more quickly; and which will therefore deliver -more- renewables -more- quickly over the next several years.

    A note on Brightline Defense Project’s support of the deal. I’ve worked extensively with Brightline, and I totally understand its position. Brightline managed to take a proposal that had totally lame local and workforce hiring requirements, and leverage Recurrent into agreeing to some of the best local, low income community hiring standards the City has ever seen. Since Brightline’s core mission is to help marginalized neighborhoods and workers, it makes perfect sense for Arce to support the deal.

    His point above is perfectly valid. Until we opponents show him that we are creating a public owned alternative that will be approved right away and start hiring those workers, he is going to stick with the bird he’s got in the hand, instead of letting go of it and searching for two in the bush that might not be there.

  • Jerry Schwartz

    Hi Brookse32< totally agree with you. I am not very familiar with Brightline but I respect what Joshua has done. My main point is that the communication he sent out is more political than non profit.

    At one point he was explaining how Mirkarimi was a big supporter of Brightline but when Mirkarimi voted against the Recurrent deal, Joshua should have explained to his supporters why there wazs a difference of opinion. Not to do so was at best unfortunate.

    There is also some talk that Joshua’s group are strongly supported and advised by Fiona Ma’s staff. If this is true, then there is another question of independent thinking and credibility.

  • brookse32

    I’m uncertain on the Fiona Ma point, however, I prefer to judge organizers by their actual actions on the ground.

    In that regard, I can tell you that Joshua Arce and I have worked very closely as a team (with help from Sierra Club) over the last two years to successfully turn the City around to refuse the quasi-state agency Cal ISO’s insistence that the City requires fossil fuel plants for electricity security; and now the City is on the verge of ending large scale fossil fuel electricity generation by the end of 2010.

    That victory would not have happened without Arce’s diligent work.

  • Jerry Schwartz

    Yes you are probably right. it sounds like you are close to Brightline. The information I have from supervisor aides is that support for Joshua is less than it was in City Hall when supervisors learned that Fiona Ma’s team were heavily advising Brightline. That news was not well received in some offices. I looked on Brightline’s website and there is no reference to such support but that “may because a) It is not true or B) Lack of Brightline transparency.

    It appaers Brighline has only started walking City Hall corridors in recent months and has already lost some ground in being seen as a trusted independent party.

  • http://thepriceofuranium.com Ann Garrison

    i turned on SF.gov and watched the Board vote against sending the Recurrent contract back to Committee, and then vote to pass it, and, thus, vote against public power.

    Voting aye: Mar, Chu, Dufty, Elsbernd, Maxwell, Alioto-Pier. No: Daly, Mirkarimi, Campos, Avalos.

    I haven’t felt more discouraged by a Board vote since it passed the Bayview Hunters Point Redevelopment Plan.

    Earlier in the day I’d been on KMEC Radio-Ukiah talking to some folks fighting the PG&E wave energy plan on the North Coast, in Mendocino and Humboldt, a form of big energy colonization of rural America, to make profit for PG&E on the Southwest Grid, much like big energy’s colonization of Native America.

    They asked what was at issue here today and I tried to explain, and to explain CCA, but when they asked, “How’d you do that?”, meaning create public power, I had to say that we didn’t do it, that the Board passed CCA legislation that’s been gathering mold for two years,, because Gavin Newsom, or whoever else is mayor, controls the SFPUC by appointment, and it costs a lotta big corporate money, meaning PG&E money, to be elected mayor in this town.

    And I said that Gavin Newsom had pretended to support CCA because he’s running to replace Arnold Schwarzenegger as Governor Greenwash II, that Newsom then did everything he could to block CCA’s implementation, and, that now we’re suddenly gonna get corporate solar, not public power, all over public solar real estate, at the Sunset Reservoir.

  • http://thepriceofuranium.com Ann Garrison

    David Chiu. I forgot to add that David Chiu voted against the Recurrent Energy contract. Thanks to David Chiu for that.

  • http://www.fogcityjournal.com/profiles/profile_luke_thomas.shtml Luke Thomas

    Ann, Chiu voted to send the item back to committee, but when that failed, he voted for the contract. He did the same last week: Voted for Mirkarimi’s amendments and when they failed, voted for the contract.

  • http://thepriceofuranium.com Ann Garrison

    Thanks for the correction, Luke. I remember being surprised by David Chiu’s vote with the progressive coalition, to send this debacle back to committee.

    Green is a bankrupt corporate brand, aside from the global Green Party’s fairly resilient credibility. Otherwise the word “green” sends up red flags and turns on sirens that say, “Planet trasher, people crusher, corporate sociopath, warmonger.”

    Here’s for anyone who still thinks that all things green, or solar, are good:

    Clean green nuclear war machine
    http://www.tiny.cc/

    “Anyone who doubts the reliability of clean energy need only take one look at one of the most enthusiastic customers for renewable power–the United States military.” –SmarPower President Briane Keene, http://www.smartpower.org/blog/?p=1161