County leaders gear up for solar fight

Litigation looms over Panoche Valley Solar Farm

The San Benito County Board of Supervisors is preparing for a fight over the Panoche Valley Solar Farm.

On Tuesday, supervisors approved a contract not to exceed $60,000 for legal representation in the county’s pursuit to fix breaches in the development agreement with ConEdison Development, which is behind the 26,000-acre solar project.

This latest move comes after the county issued a notice of default to the energy behemoth last month.

The county believes ConEdison is in breach of the development agreement because the company failed to establish a business location in the unincorporated area of the county, resulting in a loss of sales tax revenue for the jurisdiction.

County policymakers also directed staff to consider dialogue and mediation, and they approved a standing item at future meetings to ensure they remain updated on progress.

Last month, supervisors learned the solar project would be reduced from 247 megawatts to around 130 megawatts because of a settlement agreement between ConEdison and environmental groups who wanted to protect the valley for wildlife conservation.

County Clerk-Auditor Recorder Joe Paul Gonzalez said a 247-megawatt plant would produce $25.6 million in tax revenue for the county, compared to $8.9 million at its current projected size of 127 megawatts.

“That’s $4.6 million in sales tax and $4.3 million in lieu of property tax,” explained Gonzalez, adding that he got his estimates from public information sources.

“We don’t have any sort of direct reporting from ConEd regarding these revenue sources,” he said.

ConEdison Development Director of Project Development Eric Cherniss addressed the supervisors.

“First, let me just say that we recognize the communication with the county regarding some of these complex issues has not been ideal,” Cherniss said. “We’re working hard to rectify that moving forward. We do have a commitment that [Panoche Valley Solar] will make good on all of its obligations under the development agreement, which are substantial.”

Cherniss also addressed the downsizing of the project.

“Right now, we have the approvals necessary for the current 247 megawatt project. We don’t have approvals necessary to potentially reduce that project. In the event that those approvals do come to fruition, we’ll continue to have what I hope to be a fruitful dialogue with both the supervisors and staff.”

Supervisor Anthony Botelho asked Cherniss if an office had opened in the unincorporated area where the expenditures could be credited to the county. Cherniss said a fix was put in place to resolve future sales tax revenue.

“We also have changes in place to resolve retroactively some of the activities that have occurred on the site to fix that situation,” Cherniss said. “[The office] is actually on the project site on Little Panoche Road.”

Board Chairman Jaime De La Cruz said he remembered going to Sacramento with former Supervisor Margie Barrios to lobby support for the project.

“We believed in this project being beneficial to our community,” De La Cruz said. “Now to hear the numbers presented to us saddens me.”

De La Cruz said he hoped ConEdison Development would commit to paying out the economic value of a 247 megawatt plant.

“I know you have 125 out there on the floor at the moment. I don’t know what else to say other than we did have a gentleman’s agreement and I think it’s time your party fulfills their obligation,” he said.

During public comment, resident Marty Richman said it was the environmentalists that ran the project down.

In July, a court settlement agreement between ConEdison Development and the California Fish and Wildlife, the Sierra Club, Defenders of Wildlife and the Santa Clara Valley Audubon Society reduced the size of the solar project to around 1,300 acres. More than 26,000 acres is expected to be preserved for wildlife habitat for endangered species in the region.

“I agree, they haven’t lived up to their obligations on taxes,” Richman said. “But you can’t make them pay taxes for 247 megawatts that they can’t build through no fault of their own. Where are our legislators? Why weren’t you in on the meetings? Why were you frozen out? Our legislators knew those meetings were going on and you didn’t. Shame on them and shame on you.”

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