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PUC approves 25‑year solar power purchase agreement for Sunset Reservoir and Pier 96
Summary
The San Francisco Public Utilities Commission approved a 25‑year power purchase agreement with Recurrent Energy to install about 4.7 MW of solar at Sunset Reservoir North Basin and Pier 96, a move staff says will add renewables and create dozens of green jobs while costing the utility roughly $1.6 million a year.
The San Francisco Public Utilities Commission voted to authorize a 25‑year power purchase agreement enabling a private developer to finance, build, own and operate solar arrays on city property at Sunset Reservoir North Basin and Pier 96 and to sell the output to the SFPUC. Barbara Hale, assistant general manager for Power, told commissioners the two facilities together would add about 4.7 megawatts of solar generation and bring the municipal portfolio to roughly 7 megawatts.
Hale said the negotiated blended power price is about 23.65¢ per kilowatt‑hour and the PUC’s estimated annual purchase cost for the project is about $1,600,000. The presentation estimated construction costs at roughly $45 million and said the contract gives the city a right, after seven years, to buy the facilities for $33 million or fair market value, whichever is higher.
The report framed the PPA as a way to expand the city’s renewable capacity and create local jobs. Hale said the project is expected to generate between 56 and 60 new “green jobs” during construction and that adding distributed generation supports grid resilience on the peninsula. Speakers also noted the project’s compliance with state renewable portfolio standards for small renewables (large hydro does not qualify under state rules, the staff presentation said).
Commissioners pressed staff on cost, contract length and budget effects. One commissioner described the 25‑year term as “a very long time” and asked whether a shorter commitment would lower the per‑kilowatt‑hour price; staff answered that shorter terms typically raise the price and noted an option for the city to purchase the asset after seven years. Members also asked how the project fits into discretionary renewable spending; staff said the item represents about 12% of existing annual discretionary spending on renewables and energy efficiency.
A speaker from the Vote Solar initiative urged the commission to consider the value of in‑peninsula generation for grid support and pointed to comparable prices elsewhere, and another public commenter questioned neighborhood outreach in the Sunset. Hale said the PUC intends to proceed through the usual appropriation process each year and will provide additional outreach and design details to operating staff for review. The commission voted in favor of the authorization by voice vote; the motion carried.
The PUC will now proceed with the authorization steps required to transmit the PPA and related site lease to the Board of Supervisors and to pursue annual appropriations as needed.
