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Differing Analysis Fuels Energy Regulation Debate

New energy regulations have left a Sunnyvale fuel cell producer criticizing Santa Clara’s public utility, claiming the changes do more harm than good.

Several Bloom Energy employees turned out to the Santa Clara City Council meeting Tuesday night to protest Silicon Valley Power’s (SVP) latest requirements. Those requirements mandate energy generators tapping into the SVP grid mirror the City’s renewable energy portfolio.

Although the amount of renewable energy the City uses exceeds the state-mandated threshold, Manuel Pineda, Interim Electric Utility Chief, said being so aggressive with green energy use is “the right thing to do.”

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In 2017, the City used 36 percent renewable energy and 72 percent greenhouse-gas-free energy — a designation that also includes large hydroelectric; in 2018, those numbers were 39 and 56 percent respectively.

Several of the more than 20 speakers, many of whom worked for Bloom Energy, took issue with how SVP characterized natural gas fuel cells, which Pineda said do not meet the requirements.

Josh Richman, Vice President of Global Business and Development Policy at Bloom Energy, said the regulation will harm air quality, which run contrary to the City’s climate action plan. The regulation will also eliminate consumer choice, he added.

Not only is the regulation unfair, Richman said, the process was not transparent or collaborative, referring to the resolution not being available until the Thursday before the meeting and the data being unavailable until the night of the meeting.

“This is not the way good policy is made,” he said. “This is the wrong policy at the wrong time.”

Richman implored the Council to consult third-party experts, saying he was confident those experts would say natural gas fuel cells are an environmentally friendly source of energy.

The regulation is tantamount to a fuel cell ban, many said.

Suresh Pichai, Director at Equinix, said it is unfair that the City is hobbling companies like his from exploring innovative technologies.

“It looks more like a monopoly trying to prevent competition,” he said.

Christy Lewis, an analyst with WattTime, a nonprofit tech startup with a focus on energy, said SVP should be measuring marginal emissions as opposed to average emissions to get an accurate estimate of how much greenhouse gas is going into the atmosphere.

Pineda differed with many of the speakers on several points, including whether the regulation would result in poorer air quality. Also, he said, since very little of the City’s energy is produced using natural gas, “replacing” it with fuel cell generation is not a viable option.

But it wasn’t just Pineda who differed.

Suds Jain, the City’s de facto resident environmentalist, accused Bloom supporters of “cherry picking” facts. What Bloom Energy supporters don’t mention, he said, is the methane leakage from converting the gas in the fuel cells into hydrogen or the environmental impact of the fracking to secure the gas in the first place.

Bruce Karney, with carbon free Silicon Valley in Mountain View, said he “applauded” the regulation.

“Please do not turn Mission City into Emissions City,” he said.

The Council had little to say that addressed any of the issues raised by Bloom Energy proponents. The Council passed the regulation unanimously.

Budget Adds New Employees as Deficit Shrinks

Despite teetering on the edge of deficit over the next decade, the City will add about 20 new positions in the next fiscal year.

City employees managed to eliminate an $8.7 million deficit for this fiscal year as well as trim even bigger deficits in the upcoming years — $13.8 million and $24 million respectively. Next year’s deficit is down to $3.5 million with a $6.7 million deficit the following year.

While most of the years projected in the 10-year forecast are showing a surplus, City Manager Deanna Santana said the City is only in the black by roughly $1 million in some years.

“The margin is still very much narrow,” she said. “We are still in a very fragile condition.”

Although the City doesn’t seem to have much wiggle room in the way of spending, it is, Mayor Lisa Gillmor said, “woefully understaffed.” The new positions include an assistant city manager, management analyst, two positions in the sports and recreational assets department, a real estate attorney, web/digital media manager and a public benefits person in the sustainability office.

Salary and benefits for City employees account for 72 percent of the $826 million budget, which will balloon to more than a $1 billion in 2020-21.

Santana said despite the City’s precarious situation, the City is aware of the risk factors that put the budget in danger, e.g., labor costs, CalPERS reform, a downturn in the economy, a reduction in tax revenue, pending settlement agreements, to name a few.

Marijuana Sale Pushed Out Another Year

What began as a consent item pulled for discussion evolved into a heated exchange. The Council was set to extend the moratorium on the sale of marijuana for recreational use for another before Rob Jerdonek had the item pulled for discussion.

Jerdonek has previously been critical of allowing commercial marijuana sale, saying recreational marijuana use has hidden costs, namely an increase burden on law enforcement and hospitals.

He and a few others beckoned the Council to consider banning the drug instead of extending the moratorium.

“It is time to just end it,” he said. “Make the ban permanent, focus your energy on other things.”

Although he said it “made sense” to extend the moratorium, Sean Kali-Rai, President of the Silicon Valley Cannabis Alliance, said the opinions of Jerdonek and others who spoke out against marijuana use were “based in fear, not fact.”

Banning the recreational use of marijuana has resulted in pending state-level legislation that would mandate cities to allow a certain number of dispensaries based on population.

“This is not about reconsidering Prop. 64 (which legalized marijuana for recreational use),” Kali-rai said. “This is what happens when you punt the ball.”

Council Member Karen Hardy took the implication that if the City doesn’t honor the will of California voters that the state will impose a solution on Santa Clara as a threat.

Council Member Patricia Mahan said she didn’t believe Jerdonek and others were speaking out of fear.

“I resent you mischaracterizing those speakers,” she told Kali-rai from the dais.

The Council voted unanimously to extend the moratorium another year but did not, as Jerdonek and others requested, ban commercial marijuana business.

Council Aims to Amend Charter

The Council also voted on appointing a new Charter Review Committee.

The City is still appealing the decision in its California Voting Rights Act (CVRA) violation case that mandated it to put six election districts in place. However, City Clerk Hosam Haggag brought forward a resolution to seek a committee to put a measure on the ballot determining whether Santa Clara voters prefer to stay with the six-district solution or envision something else.

Since the CVRA ruling was a remedy to the at-large system, said City Attorney Brian Doyle, while the City appeals that ruling, it should change its Charter based on how the voters would like to select their elected officials.

Each Council Member will select a small pool of candidates from his or her district. Then, the Council will select a candidate from each district and an at-large candidate, creating a seven-person committee. The Council will select the at-large candidate from the unchosen candidates.

The proposed ballot initiative would appear on the November 2020 ballot. Any changes to the districts made via a Charter amendment would go into effect in 2022.

The Council meets again Tuesday, May 21 in the Council Chambers in City Hall, 1500 Warburton Ave. in Santa Clara.

 

Editor’s Note: This article has been updated for clarity and accuracy. 

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