I had no idea it would be this hard to do a serious solar project in the city of San Francisco. No idea at all.
On Wednesday, the SF Budget and Finance Committee, after vigorous discussion and tons of testimony, moved the 5 MW Sunset Solar Project out of committee—with no recommendation–and to the full board for a vote on Tuesday, April 28th.
The main reason it got this far is because Supervisor Avalos felt it was due to all the community support it received. See his comment on this blog post. He is to be thanked for his leadership.
Now, you may be thinking: San Francisco has passed resolutions requiring 100% clean power. It’s a green city, Supervisors are famously progressive—what’s not to like?
A lot, apparently. What’s frustrating is that all the issues that have been raised have very good answers.
Some supervisors wanted to make sure that the jobs go to disadvantaged communities. Recurrent signed a First Source hiring agreement (pdf) that guarantees 30% of the jobs go to economically disadvantaged communities. I challenge you to find a better workforce development agreement. Truly a gold standard.
Some have expressed concerns about using a power purchase agreement for this project, instead of the City buying it outright. That’s an easy issue to deal with. A power purchase agreement is the only way that the city, a non-taxpaying entity, can make use of the 30% federal investment tax credit. The SFPUC calculates that if the City were to finance and build the project on its own, it would cost $25 million more.
That’s why PPAs are the only way municipal utilities and cities have purchased solar in significant quantities over the last several years. PPAs are what the Sacramento Municipal Utility District uses. It’s what the Los Angeles Department of Water and Power is proposing to use. And in fact, Community Choice Aggregation (CCA) would also use PPAs.
Others are concerned that this isn’t public power. In fact, the City has the opportunity to buy the project out at 7, 15, and 25 years—after the tax benefits are fully exhausted. It’s what public power agencies use. And again, CCA would use PPAs as well. The concern frankly just doesn’t make sense.
Some supervisors also questioned the necessity of a waiver of the city administrative code that would make future payment on the contract subject to annual appropriation of funds. In fact, this waiver is needed in order to obtain financing of the project, and is typical in municipal contracts of this sort. Banks are not willing to provide the capital to construct the project without a fixed payment stream. This is very similar to a home mortgage or any other long-term debt obligation. The SFPUC investigated the issue with various PPA providers, large financial institutions, and attorneys to try to find a way to finance the project without the waiver. All of the banks and PPAs providers objected to this language as it made the project un-financeable. In addition, the SFPUC and City Attorney’s Office reviewed many other PPAs with other public entities, such as the City of Thousand Oaks, Yuba City, and the AC transit Authority. All of these PPAs waived this requirement in order to finance the project.
Finally, the San Francisco Bay Guardian has recommended that the Supervisors delay on action, and pass a resolution instead.
Resolutions have been passed before, and the polar ice caps are still melting and San Francisco residents are still unemployed. It’s time to put people to work and fight global warming with real projects, not rhetoric.
Because if San Francisco can’t find the way to getting serious about solar, then I say: Humanity, put a fork in yourself. You are done.