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SFPUC authorizes negotiations with Recurrent Energy for two solar plants after amendment
Summary
The SFPUC voted May 13 to authorize exclusive negotiations with Recurrent Energy for two city-site solar photovoltaic plants and amended the resolution to require negotiated agreements return to the commission for approval; staff cited an estimated cost of 23.65¢/kWh with federal tax credits and a higher figure if credits lapse.
The San Francisco Public Utilities Commission voted May 13 to authorize exclusive negotiations with Recurrent Energy for two solar photovoltaic projects on city-leased sites and to seek Board of Supervisors approval for a 25-year agreement, but the commission amended the resolution to require that negotiated agreements be brought back to the commission for approval prior to execution.
Barbara Hale, assistant general manager for power, said the PUC received five proposals and evaluated two responsive bidders. The recommended awardee, Recurrent Energy, proposed projects on Port property at Pier 96 and on SFPUC property at the Sunset Reservoir with a combined minimum capacity of 5 megawatts. "This is the first time we have pursued a power purchase agreement structure for development of solar here in the city," Hale said.
Commissioners pressed staff on price. A PUC staff member identified as Mr. Doyle said the winning bid would result in an average power price of 23.65¢ per kilowatt-hour if federal tax credits are available. Without an extension of the federal tax credit, Hale said Recurrent’s proposal equates to about $0.322 per kilowatt-hour. A commissioner said those ranges make the PPA markedly cheaper than the PUC’s own on‑site build costs (which staff estimated above $0.30–$0.35 per kWh).
During discussion, Commissioner Sklar moved an amendment to remove the authority to "execute" directly and to require that a negotiated agreement be returned to the commission for approval; the City Attorney’s Office clarified that the amendment should strike the wording and require staff to present the negotiated agreement to the commission. The commission approved the amendment and then approved the item as amended.
Hale described Recurrent Energy’s project team as including Rosenden Bass Electric for service, SunTek panels, Morgan Stanley financing and Arlo Harris as CEO (noting Harris' prior work on large-scale projects). She noted the federal tax credit’s scheduled expiration at year-end and that industry lobbying sought an extension.
The action authorizes staff to continue negotiations and to pursue Board of Supervisors approval once the commission has reviewed and approved the negotiated agreements. The commission did not authorize immediate execution at the meeting.
