The final word: The deal between Recurrent Energy and the city and county of San Francisco was approved 7-4, with the dissenting votes coming from four out of six progressive Supervisors. Ground is supposed to break — well, figuratively, of course, since it’s on top of a vital water reservoir — later this year.
Relive the liveblogging excitement below
Hi. Glad to have you with us.
As with all public meetings, this brouhaha is also viewable, with a slight lag, on SFGTV.
2:10 p.m. We settle in a little bit late but manage to snag a seat up front. The place is packed with all sorts of sundry folk, but mostly public access TV supporters. We appear to be the only dork with a laptop aside from the supervisors themselves.
2:11 p.m. Someone stinks like month-old Winston filters. We assume it isn’t us, because we’ve quit, but you never know.
2:15 p.m. Ok, here we go — the Board cruises through its consent agenda and gets to item 9, the oft-contentious deal between the city of SF and solar energy firm Recurrent Energy. To recap: the SF PUC brokered a deal with Recurrent for the firm to build a giant solar energy farm atop a Sunset District reservoir. A divide has arisen between the Mayor’s buddies on the board — specifically, legislation sponsor Carmen Chu — and the progressives, who think the deal, in a word, stinks.
2:20 p.m. Both Chu and Supervisor Ross Mirkarimi have introduced amendments to the deal — Chu’s would allow the city to buy the solar farm outright from Recurrent anytime after Year 7 of the 25-year deal, not just a one-time opportunity. Mirkarimi’s amendments would allow the city to buy it outright for the less of about $32 million or fair market value.
2:28 p.m. Oh god, voting!
Ok, Chu’s amendments pass unanimously. That, of course, means that the legislation itself can be voted down regardless. Now Mirkarimi’s talking about his amendments, the key bit is the power-purchasing agreement (PPA). Under Mirkarimi’s amendments, the city every year gets a report from the PUC on the status of the project — the amount of energy produced, the cost to the city, and suchlike.
Mirkarimi’s amendments to the PPA oversight pass 10-1, with Sup. Michela Alioto-Pier the lone naysayer. Now we vote on what’s probably the biggest change suggested by Mirkarimi — allowing the city to buy the project outright at $32.4 million or fair market value, whichever is LOWER.
2:36 p.m. Uh-oh, big problem: PUC general manager Ed Harrington says that that would torpedo the deal: Recurrent Energy will only get the funding necessary to build the huge stinking thing if it can get a federal tax break. That tax break is the reason why the city wants a private company build the project in the first place.
“it would be nice [to allow the city to buy the project at the lower of fair market value or $32.4 million,]” Harrington said, “but in the business world, you do not sell a project for less than fair market value.”
According to Harrington, if that language was in the deal, the IRS wouldn’t view it as tax-exempt, ruining everything.
2:55 p.m. Mirkarimi’s amendment fails. The deal-breaker was none other than Supervisor Eric Mar, in what is — to our recollection — the first major break, vote-wise, with the rest of the progressive bloc.
2:58 p.m. Mirkarimi’s last amendment is the annual review. Under most contracts, the Board makes an annual decision on projects such as this whether or not to continue paying for the project, via choosing whether or not to appropriate the funds necessary to complete the contract. Chu’s legislation waives that right, and Harrington says that Recurrent’s lenders will not loan the company the capital necessary to build the project unless the waiver is included. Harrington says that the amendment suggests the city won’t pay; David Campos dissents.
3:03 p.m. If we had to wager, we would guess that that 6-5 vote to reject Mirkarimi’s amendment, with Eric Mar as the swing vote, portends well for supporters of the project.
3:05 p.m. We now have had a few minutes of legal wrangling between Harrington and Campos, as to whether or not the waiver of the administrative review clause. Harrington likens it to a partial guarantee of a loan, and what bank would accept such an agreement?
“It wouldn’t occur to me to ask whether or not a bank would accept a partial guarantee of a loan,” Harrington told Campos.
The amendment’s shot down. Whatever the supes now vote on will be more or less exactly what’s been on the books for quite some time.
3:18 p.m. “Going green doesn’t mean going green stupid,” said Supervisor Chris Daly, who voices his intention to vote against the deal as currently brokered. His position is that we the people — the taxpayers and the ratepayers — will be paying too much for power down the road.
3:21 p.m. The project is approved, to applause from the crowd — and, presumably, the PUC. The dissenting voters were Mirkarimi, Daly, Campos and John Avalos.
