Just when it looked like the sun would go down on Palo Alto CLEAN, the City Council offered the program a boost of energy when it voted not to proceed with a proposed rate change that critics say would have doomed it.
The program, which allows customers to sell solar energy to the city, was slated to undergo a dramatic change after the council's Finance Committee unanimously recommended last month to slash the price that the Utilities Department would pay for the locally generated energy.
At the Feb. 16 meeting, the committee unanimously voted to reduce the rate from the existing level of 16.5 cents per kilowatt hour to the "avoided cost" price of 8.9 cents per kilowatt hour for a 20-year contract.
The change was set to be approved by the full council last week but was put on hold after protests from local clean-energy advocates. The council agreed at that time to delay its decision and to hold a public hearing on the proposed change. On Monday night, it handed Palo Alto CLEAN's champions another victory by scrapping the Finance Committee's recommendation and continuing the program's current pricing.
The Finance Committee recommendation came at a time when Palo Alto CLEAN is finally showing signs of life after three years without any applications. The Unitarian Universalist Church of Palo Alto submitted the first application in December 2015 a solar canopy that will be installed over the church's parking lot. And in February, the city received four other applications from Komuna Energy for projects involving solar panels on rooftop of city-owned parking garages.
Finance Committee members reasoned that wholesale prices for solar energy have been dropping dramatically (last week, the council approved a solar contract with a California record-setting rate of 3.6 cents per kilowatt hour) and that the city's operational reserves have dwindled.
Councilman Eric Filseth, who chairs the Finance Committee, reiterated these arguments Monday. The practical benefits are "tenuous," he said, and while the costs aren't that high at the current level (if the program reaches its cap of 3 megawatts, the city's subsidy would be about $380,000 annually; the five existing applications add up to about 1.3 megawatts), they "could increase significantly if it expands beyond the pilot."
But he ended up being the sole dissenter in the 6-1 vote (with Greg Scharff and Karen Holman absent) -- a decision that followed a procession of speakers preaching the program's merits and blasting the Finance Committee's recommendation. Craig Lewis, founder of the renewable-energy nonprofit Clean Coalition, said that the program gives the city its best chance for reaching its adopted goal of getting 4 percent of its solar energy from local sources.
"The only way Palo Alto will fulfill the 4 percent local solar goal is to open it up to the commercial market segment," Lewis said. "It's the only segment where we can get the rooftops and parking lots we need to fill the volume of local solar that we need. Palo Alto CLEAN is by far the most cost-effective approach."
Councilman Greg Schmid, who sits on the Finance Committee and who recommended the rate change, was skeptical about claims of the program's "cost effectiveness." He cited the low rate in council's new solar contract with Hecate Energy and asked whether it's time to consider other ways to spend the money that the city would save with the low rate. But when it came to the vote, he joined the majority in scrapping the committee's recommendation.
Councilman Cory Wolbach also reversed his stance, but with far less ambivalence. He offered a simple explanation for the February vote.
"I think we made a mistake," Wolbach said.
The council generally agreed with speakers who maintained that the proposed change would effectively kill Palo Alto CLEAN. Bruce Hodge, founder of Carbon-free Palo Alto, urged the council to "avoid essentially killing a pilot program that is only just beginning to bear fruit."
Michael Closson, former executive director of Acterra, agreed and also spoke out against the proposed change.
"It's very important at this point in time to keep the tariff the way it is and allow Palo Alto to reach its target," Closson said.
Like some of the speakers, Mayor Pat Burt argued that it's not appropriate to compare the wholesale solar rate to the rate in Palo Alto CLEAN, which carries the benefits of localization. The public subsidy for the program would not be an anomaly, he noted, given that the city already provides subsidies for things like electric-vehicle chargers and its Zero Waste recycling program.
Burt urged the committee to think "more broadly and deeply" about issues like this one and chided its members for approving a rate change that was "really meant to end the program."
"Using this as a backdoor way to kill that program and, indirectly, kill the local renewable program is really, I think, not proper," Burt said.