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SFPUC authorizes exclusive negotiations for Sunol Valley quarry after contested presentations
Summary
The commission authorized exclusive negotiations with Oliver Da Silva Inc. for the Sunol Valley aggregate quarry lease after hearing competing financial analyses and environmental concerns; the motion passed 3–1 and commissioners asked staff to pursue stronger assurance on environmental protections and revenue certainty.
The San Francisco Public Utilities Commission voted 3–1 to authorize exclusive negotiations with Oliver Da Silva Inc. for a proposed agreement to operate the Sunol Valley Aggregate Quarry (surface mining permit SMP 30, Calaveras Road).
The vote followed extended public comment and competing presentations from proponents, opponents and technical consultants. Ralph Cairns of the Alameda Creek Alliance urged that any mitigations be enforceable long term and questioned impacts on the Apperson Ridge area. Representatives from CEMEX argued their proposal offered higher guaranteed royalties and a stronger near-term financial return, while the Da Silva team emphasized feasibility of Apperson Ridge and local experience.
Independent and party‑sponsored analyses presented to commissioners examined net present value (NPV) and cash-flow profiles under different discount-rate assumptions. A consultant engaged by the commission recommended discount rates tied to the agency's borrowing or investment returns (approximately 4–4.5 percent), noting that higher discount rates or probability-weighting would reduce the relative value of distant future revenue streams such as those projected for Apperson Ridge.
Commissioners debated the environmental trade-offs and the uncertainty of long-horizon revenues. One commissioner said that when the NPV results fell within the margin of error the decision was no longer close for them, citing concerns about entering a financial arrangement that could incentivize significant disturbance of a wilderness area. Another commissioner emphasized procedural constraints in changing the RFP process midstream and expressed confidence in staff to negotiate stronger protections and contractual assurances.
Following discussion, the commission approved the motion to enter exclusive negotiations with conditions that staff negotiate on environmental mitigation enforceability, minimum royalties and other financial terms. The motion passed by roll-call as 3 in favor and 1 opposed.
The commission directed staff to return with negotiated terms and to continue environmental review and stakeholder outreach as required by law.
