Palo Alto's newest solar-energy program has plenty of fans but, so far, not a single user.
Dubbed Palo Alto CLEAN (Clean Local Energy Accessible Now), the program allows customers with solar panels to sell energy to the city's Utilities Department for a fixed, long-term rate. The program made its debut in 2012 and has amassed a small legion of dedicated supporters in the environmental community, some of whom are hoping to take advantage of the program in the near future. Yet after three straight years of failing to attract any participants, the nascent program was on the verge of flickering out on Wednesday night.
Instead, the council chose to let the program buzz along with some small tweaks. After a long debate, the council rejected a unanimous recommendation from its Finance Committee to drastically reduce the city's subsidy for Palo Alto CLEAN. The committee, which includes Vice Mayor Greg Schmid, Councilwoman Liz Kniss and Councilmen Eric Filseth and Greg Scharff, suggested reducing the amount that the city would offer for locally generated solar energy from 16.5 cents per kilowatt hour to 10.3 cents. This would effectively make the city's rate for locally generated energy equal to what's known as the "avoided cost" -- the cost of buying solar energy from distant providers and transmitting it to Palo Alto.
According to Utilities Department staff and to the program's advocates, the change would effectively kill the program by making what is already a tough sell even tougher. The city's Utilities Advisory Commission had also recommended keeping the existing rate in place.
"At this point, we've had the program in place for a number of years and we've never had anyone take us up on it, even at 16.5 cents," Jane Ratchye, assistant director of the Utilities Department, told the council on Wednesday night. "I think it's kind of clear that it's fairly unlikely that anyone will take us up on the program if the price dropped to the avoided cost of 10 cents."
In advocating for the change, Scharff and Filseth both argued that with solar prices from large-scale providers in rapid decline, it would be fiscally irresponsible to offer such a high rate to local generators. Scharff called the program "largely symbolic," while Filseth protested that the city is spending public funds on "something incredibly ephemeral." Both stressed that it would do nothing to reduce greenhouse-gas emissions.
"I think it's an irresponsible thing to do and I won't support it," Filseth said.
But supporters of the program characterized the Finance Committee's recommendation as nothing short of "betrayal." That's the term local environmentalist Walt Hays used to describe the proposed changes to Palo Alto CLEAN. He noted that several local groups have been preparing proposals for the solar program under the assumption that the city's terms would remain constant.
"It's a total betrayal of the people who spend money and make good-faith efforts on the (16.5 cent) price," Hays said. "It would destroy any confidence in the city. ... No one would ever apply, not knowing what the City Council will do next."
Though the city has yet to receive an application, there are at least two promising proposals currently in the works. The city is negotiating with the company Pristine Sun for installation of solar panels on city garages. At the same time, the Unitarian Universalist Church of Palo Alto has been putting together a proposal to participate in Palo Alto CLEAN.
Craig Lewis, founder of the local nonprofit Clean Coalition, argued that it's important to preserve the program in its current form to provide certainty to the "many parties currently pursuing Palo Alto CLEAN projects." His group is involved in both of the aforementioned projects and he noted in a letter to the council that he has already incurred about $250,000 in costs for staging these projects.
Troy Helming, CEO of Pristine Sun, addressed the council and said that if the rate change were adopted, his company would "have to exercise the right to walk away." And Bruce Hodge, founder of the group Carbon Free Palo Alto, said resetting the terms of the program "is not only unfair to parties that have initiated projects, but will also be perceived as a clear signal to avoid this program in the future."
The council majority ultimately agreed and voted 6-2, with Scharff and Filseth dissenting and Kniss absent, to keep Palo Alto CLEAN in place with the existing rate.
"If we're having a carbon-neutral electric supply and striving toward a carbon-free city and a sustainability model, there is a real value of a physical presence of renewables within our community," said Councilman Pat Burt, the leading proponent of keeping the 16.5-cent rate in place.
The council also agreed to use the $154,000 that the city will be receiving in annual lease payments for the parking-garage program to support Palo Alto CLEAN, thus reducing the program's impacts on electric customers.
Though the prices will remain as is for now, council members agreed that the rate needs to be gradually reduced in the coming years, after the first few projects get adopted. Utilities staff will return at a later date with proposals for future rate changes.
Councilman Tom DuBois noted that Palo Alto CLEAN is still in its pilot stage and made a case for keeping the rates steady for now.
"I see value in getting experience in running solar in the city," DuBois said. "I see value in diversifying resources. I don't see the value in killing the program."