The million-dollar program, which allows residents and businesses to pay a premium to fund the city's purchase of electricity from renewable-energy sources, has been in place since 2003. But due to the city's progress over the years in contracting with more green-energy providers, Palo Alto's portfolio is, for the first time ever, completely carbon neutral.
In a long and contentious meeting Wednesday night, the Utilities Advisory Commission voted 4-2, with James Cook and Audre Chang dissenting, to recommend that the City Council suspend the PaloAltoGreen program for residents while reducing the amount businesses pay into the program.
The commission hopes that the recommendation will buy staff and the council time to come up with a viable plan for what to do with the program.
Since 2012, expenses for the program have been cut in half, due mostly to lower costs for so-called Renewable Energy Certificates, which are credits that fund green-energy programs nationally. As a result, a surplus of money has gathered as customers continue to pay premium rates.
The highly successful program has continued to be popular with residents and businesses alike, said Commissioner Jonathan Foster. The commission's recommendation would suspend collection of residential fees and purchase of certificates while reducing costs for businesses from the current rate of 1.5 cents per kWh to 0.2 cents per kWh.
"We are not going to exacerbate the problem of continuing to collect money at the rate of 1.5 cents a kWh, but we are not going to shut down and mothball and file away the program because we might come up with some way we want to recast the program in the future," Commissioner Steve Eglash said.
Money from the program is, according to commissioner John Melton, "greening up" non-renewable energy, such as hydroelectric, which makes up half of Palo Alto's portfolio. Currently, 21 percent of the city's power is supplied from renewable energy. By 2017 Palo Alto plans to have half of its energy supplied from renewable sources.
Palo Alto residents Bruce Hodge and Walt Hays spoke in favor of continuing the program and using it to fund a community solar initiative. The idea was considered by the commission, which decided that such a fund would be too contentious for rate payers, especially if no such community solar plan was implemented.
Foster proposed halving the cost for those enrolled in the program and using the revenue to establish a seed fund that would be used to install solar panels on Palo Alto Unified School District buildings. The idea was met with opposition from other commissioners and Director of Utilities Valerie Fong, who did not want to have a fund created when there was no plan of what to do with the money. Eglash was concerned that lawsuits could follow if the fund was not used for the purpose of installing solar panels on schools and questioned what would then happen with the money.