Article by Brandon Nguyen
San José City Council discusses a long-term renewable energy contract with Zeta Solar, and reviews the mid-year budget report generated by the Budget Office.
Zeta Solar Contract
Zeta Solar is a subsidiary of Longroad Energy, a renewable energy company based in Boston that develops, owns and manages wind, solar and storage projects throughout North America, according to its website.
The resolution would authorize Lori Mitchell, the Director of the Energy Department to negotiate and execute a long-term power purchase agreement with Zeta Solar.
The long-term power purchase agreement would allow the city to sell renewable energy, renewable energy credits, resource adequacy, battery tolling rights and storage to the Energy Department, according to the resolution.
Mitchell said the agreement has a 20 year term, beginning in 2027 and would cost the city no more than $225 million. The key-terms to the agreement are deliverability and labor.
Deliverability means “it’s able to be connected to the transmission system,” said Mitchell.
Mitchell said the California Independent System Operator, the organization that operates the transmission system, needs to make an agreement by Feb. 14.
She said deferring this proposition would likely postpone the construction of this renewable energy.
Will Smith, an apprentice electrician for Allison-Smith Company and a representative for the International Brotherhood of Electrical Workers, said there should be an amendment to the power purchase agreement.
Smith said he wants to see “strong labor language” such as prevailing wages, apprenticeship hires and multicraft labor project agreements.
Councilmember Arjun Batra asked the committee if there could possibly be any improvements in power distribution, in light of the outages caused by storms.
Deputy City Manager Kip Harkness replied that power distribution and infrastructure is handled by PG&E, and that they are cooperating with Zeta Solar for future plans and matters.
Councilmember Rosemary Kamei said the agreement should be done as soon as possible, as the deadline for deliverability is Feb. 14.
Kamei said the agreement should be amended to incorporate the labor stipulations proposed by Smith.
“This is a 20 year agreement,” Kamei said. “It is worth a lot of money, and I think that we should have high labor standards.”
Councilmember Omar Torres said he will support the motion, but that the policy needs to be revisited because “everybody has to be at the table.”
Councilmember Pam Foley said she is worried about the unintended consequences of adding the labor stipulations, as it could negatively affect future projects.
A spokesperson from Zeta Solar said the company is not taking responsibility for future projects because they have not been added to the agenda yet.
The council motioned to vote on the power purchase agreement and voted unanimously in favor.
Mid-Year Budget Review
The council also discussed the mid-year budget review report created by the Budget Office.
Budget Director Jim Shannon gave a presentation on trends in the economy including total employment, unemployment rate, real estate value and recommended budget adjustments.
Shannon said employment is up 11,000 jobs from last year, but the unemployment rate increased by around 2%.
Shannon said that back on Jan. 23, the Council approved an allocation of $150,000 to send to Amigos de Guadalupe Center for Justice and Empowerment, but since the contract was never executed, the funds were available for redeployment.
The Amigos de Guadalupe Center for Justice and Empowerment is a non-profit organization which provides various resources such as educational programs, temporary housing for needy families, rental and deposit assistance, and protection and accompaniment to those facing the threat of deportation through its Rapid Response Network, according to its website.
Shannon suggested reallocating $100,000 from the technical/rebalancing fund to “replenish funds originally intended to support the Rapid Response Network.”
Other suggestions include establishing the San José Opioid Response Fund with funding from the National Opioid Settlement, extending fire captain positions in the fire department, and waiving dog and cat license fees for income-eligible residents, among other measures.
Matt Tuttle, president of the San José Firefighters Local 230, took to the podium and called for support of the budget review recommendations.
“We are still the lowest staffed big city department in the nation and are still operating at similar levels from decades ago,” Tuttle said.
“A city the size of San José should have anywhere between 60 to 70 [fire] stations, but we only have 33 stations, and our staffing is still the same since 1980,” said Councilmember Bien Doan.
Councilmember Peter Ortiz said he supported the budget review report recommendations, as it would “allow for the completion of the full scope of repairs to the roof and replacement of the windows” for the African American Community Service Agency.
“I do like that our budget is pretty even, but we’re definitely not out of the woods,” Torres said.
He said he has concerns about the budget underperforming for construction, conveyance and sales tax, and suggested taxing streaming services such as Netflix and Hulu in order to make up the difference.
Shannon said the unemployment rate growth reflects layoffs, but it also means more people are “attentively joining the workforce.”
He said the overall employment growth is a positive trend for San José’s economy.
“Everything we propose to do is still on track to be done. We are not going to have any additional deficit as a result of what we are doing,” Batra said.
The council finished deliberation and motioned to vote on approving the mid-year budget review report, which passed unanimously.
