Duke Energy plans to be in the solar business for the long haul.
Brian Stallman, the senior vice president of development for Duke Energy Renewables, a new partner in the Panoche Valley solar farm, said the company is looking beyond the 2015 target of going online.
“Duke’s perspective is we will be the long-term owner,” he said.
Duke Energy Renewable’s current holdings include 11 wind farms and 11 solar farms, with more coming online in 2012.
Representatives from Duke Energy Renewables and PV2 spoke Wednesday morning at San Juan Oaks Golf Club with community and business leaders about the Panoche Valley solar project proposed for southeastern San Benito County.
The company behind the Panche Valley solar project is working through the federal environmental approval process and its officials are still searching for a key component – a power purchasing agreement with a utility – before construction can begin on the project. They are also fighting an appeal in court by a group that challenged the county’s supportive California Environmental Quality Act finding. A judge ruled in favor of the county and project, but the group has appealed that decision.
The project originated in 2009, when a company named Solargen started developing land options and moving through the planning process. County supervisors approved the project in 2010, but in 2011 Solargen ran into financial problems. Eric Cherniss and John Pimentel formed PV2 Energy, LLC to buy the assets from Solargen. In March this year, Duke Energy Renewables, part of the largest electric utility company in the United States, formed a joint venture with PV2 Energy.
John Pimentel and Eric Cherniss, of PV2, led a presentation about the reasons they want to build the solar farm in Panoche Valley, challenges to the project and an estimated timeline.
“It’s sure good to have a team like Duke behind us, but we don’t have a PPA (power purchasing agreement) and that’s critical,” Pimentel said.
Cherniss said one of the benefits to the location of the project on the western edge of Fresno County and in southern San Benito County is that an existing power transmission line runs through the project footprint. The transmission line connects the Central Valley with a power plant in Moss Landing. But the group still needs a utility to sign on for purchasing the power that will be generated, up to 399 megawatts, before construction can begin.
Pimentel said the group will be shopping the solar project to PG&E, Southern California Edison, San Diego Gas & Electric, as well as smaller utilities run by municipalities.
But the market is competitive, Pimentel said.
“Up until now there were so many projects proposed,” Pimentel said, noting that in the last several years there have been projects proposed that would have produced up to 15 gigawatts of energy. “Two-thirds of the projects are not going to happen.”
He said when the solar energy boon started up three to four years ago, projects were proposed by companies without enough capital to bring the projects to fruition or without the technology to make it work. The drive for renewable energy projects was reinforced in 2010 when Gov. Jerry Brown raised the target for the amount of renewable energy in the state by 2020 from 20 percent to 33 percent.
“It was a confused and difficult market,” Pimentel said.
John Bohn, an adviser to PV2 and a former member of the California Public Utilities Commission, said community support can go a long way to getting a project approved by the commission. He said the company still needs to get a public utility on board with a PPA, but the commissioners generally weigh local support in deciding what projects to approve.
“The overall picture in California, the overwhelming view of the public is that we need to move to renewable sources,” Bohn said. “It’s been validated in elections. People have used that platform and ballot measures have been passed. It’s a policy that is here to stay.”
Bohn said the Panoche Valley project is “a uniquely valuable asset” because it already has a transmission line.
“PG&E is always concerned with weighing that against the cost to ratepayers,” he said, of installing a transmission line.
He said when he first joined the commission he learned of the sway residents can have on the commissioners.
“I was surprised that an impact can be made by a group,” Bohn said. “Citizens need to make their voices heard.”
Some of those in attendance at the meeting included county Supervisors Jaime De La Cruz and Jerry Muenzer, Hollister Councilman Victor Gomez, business representatives and developer or construction representatives. The group fielded a handful of questions from those present.
One local farmer who drives trucks along the roadways in Panoche Valley asked if PV2 has plans to improve the roadways in the area. Cherniss said no changes had been made from the required mitigation in the CEQA. He said the company is required to leave the roads in the same shape they are in now at the end of the construction process, though Cherniss noted they would make any necessary improvements to make the roadways safe for their construction crews.
Another member of the public asked how the company would determine how much money is contributed annually to the county’s general fund, a contingency of the development agreement. Pimentel said the company will pay a use tax during the construction phase of the project, but also agreed to pay a percentage to the county based on the value of the project annually because the project doesn’t require a payment of property tax.
“For planning purposes the assumption is that .14 percent will be $1 million based on the full size of the project,” Pimentel said.
Damon Felice, a local construction manager, asked about a stipulation that the company give priority hiring consideration to local residents and offer jobs to union workers. Felice asked if the officials considered other counties beside San Benito “local” and also pointed out that many of the companies based in Hollister do not have unions.
“We are thinking about how do we attract talent and how do we advertise in appropriate ways,” Cherniss said.
Pimentel added that they would know about the hiring needs as they get into the construction phase, but he said they would likely need a mix of labor and non-union workers.
During the presentation, Pimentel and Cherniss said they anticipate the federal environmental process to be completed in the first few months of 2013. Representatives of the law firm L&G said they also anticipate that litigation against the project should be resolved by the end of the year. If a PPA is in place, construction could begin in 2013, with completion to take two to three years.
