Inyo County is learning the hard way that clean energy comes at a cost. In this case, a proposed BrightSource Energy solar power plant at Hidden Hills Ranch near the California-Nevada border could result, by County calculations, in a net loss of as much as $21.8 million in impacts to programs and services over a 28-year period that includes 3 years of construction and 25 years of operation.
Last year BrightSource Energy (BSE), an Oakland-based company with solar thermal operations in the U.S., Australia, South Africa and Israel, submitted an application to the California Energy Commission (CEC) to build two, 250-megawatt solar power plants on the 3,200 acre Hidden Hills Ranch near Tecopa in Inyo County. The plants would include two, 750-foot towers, each with 85,000 mirrors focusing sunlight on the boilers at the top of the towers, which would then run the generators near the base of the towers to produce electricity.
As stated by the BSE application to the CEC in 2011 (and reported by The Sheet), the Hidden Hills project would employ at most 1,100 workers during the three-year construction period. In October the estimate more than doubled, coming to 2,300. Yet according to Christopher Moore, VP of BSE, the Hidden Hills project would at most employ only five Inyo County residents in that workforce. While BSE maintains that the presence of a 2,300-person crew will be a boon to the County, because of the project’s proximity to Pahrump and Las Vegas, most workers would reside in and spend their money in Nevada.
Add to that BSE’s refusal to mitigate the impact to County roads created by some 2,300 commuters with heavy trucks and equipment, and the solar power project, feared County officials, would be more trouble than it was worth.
The mood therefore was tense at Tuesday’s Inyo County Board of Supervisors meeting, in which, with BSE representatives present, Supervisors discussed the merits of a proposed BSE agreement that would ensure the County a payment of $8.8 million – 18 months after the power plant commences operations. The County had initially proposed its own agreement for $7.8 million, an amount that would be reduced by the sales tax received in the county General Fund attributable to the Hidden Hills project.
BSE’s counter offer added $1 million, with the stipulation that the County agree to waive the right to any further compensation or mitigation from the CEC for project-related costs to County programs and services in excess of $8.8 million. The project-related costs could be as high as $90 million. The agreement would therefore allow BSE to deny responsibility for things like road mitigation, while only guaranteeing that the County collects $8.8 million that BSE would most likely have to pay in sales tax in any event.
So why would BSE refuse Inyo County the ability to seek compensation for additional costs? In part because BSE agrees with the CEC socioeconomic report, which estimated revenues to the County of $86.5 million over the project’s lifetime, and, using lower estimates of cost impacts, came up with an overall net present value to the County of a positive $61 million.
The County on the other hand estimated a net present value loss of $21.8 million.
Respectfully, BSE VP Christopher Moore disagreed. “It’s not that anyone did anything wrong,” Moore said at Tuesday’s meeting. “It’s that we have a different set of assumptions.” Moore was alluding to the dramatic difference between County and BSE cost assessments, which hinged on the cost of the Sheriff and Public Works during the construction and operation of Hidden Hills. Inyo County estimated a need for seven law enforcement officers and a new substation, with an initial expense of $2.1 million and ongoing annual expense of about $1.3 million. The County also calculated that the reconstruction of the Old Spanish Trail, which would be used during daily commutes to and from the job site, would be $8.1 million initially, and $78,500 ongoing.
Moore argued on behalf of BSE that the project would need only two deputies, and no rebuilding, only repair, of the Old Spanish Trail.
Nina Gruen of Gruen Gruen & Associates expressed disbelief that BSE would only want two deputies on site, noting that the solar panels would make “170,000 great targets for teenagers.” Added Claude Gruen, “There’s significant enticement for damage. I would think that you’d want officers authorized to carry weapons and make arrests on-site.”
“We should not be burdened by the presence of the BSE plant,” said Supervisor Richard Cervantes in regard to the roads. “And with 2,000 plus employees, believe me, there are going to be County impacts.”
Residents of Inyo County voiced distrust and support in equal measure for both the agreement and the project. A letter from Amy Noel, owner of the Tecopa Hot Springs Resort, elicited appreciative laughter from many members when she wrote of the proposed BSE agreement, “How dumb is this idea?” Noel’s advice: “There are better ways to benefit the County than opening our land so BSE can sell energy to PG&E.” Independence resident and former BSE employee Jim Strowe argued differently. “I’m in favor of this project,” he said. “If we vote no [on the agreement], it’s quite likely this will go to the CEC and their staff. They’re stubborn and they’re mean. You might not end up with results you really like.”
Supervisor Rick Pucci noted, “I’m all in support of renewable energy. It’s a benefit not only to our citizens but to the nation. But when representing the public, with a possible net gain of $61 million versus a net loss of $21.8 million, it’s difficult to be a gambler.”
Supervisor Marty Fortney was still more direct, addressing BSE representatives: “To expect the taxpayers of this County to bear the burden of your investors’ bottom line I don’t think is realistic, nor should it become a reality. Taxpayers shouldn’t be burdened with any cost for a project like this coming to the County.”
Supervisor Susan Cash pointed out that the BSE preferred to accept the CEC analysis of County expenses, with an assumed $2.8 million during construction vs. the County’s projected $11.1 million; and $390,000 during operation vs. County’s projected $1.7 million, and wondered whether BSE would also be willing to accept and guarantee the CEC’s revenue figures. Those revenues are projected at $86.5 million during construction and $1 million per year during operation.
Moore’s reply? “I’m not sure.”
It came as little surprise then that the Board of Supervisors unanimously voted against the BSE agreement. “We saw overstated revenues and understated impacts in the CEC report [upon which BSE based the agreement],” said Inyo County Administrator Kevin Carunchio. “But since we’re not permitting the Hidden Hills project, our department heads got treated like people off the street.”
Said Supervisor Fortney to Christopher Moore, “I don’t think you folks have felt that you have to give one inch.”
The issue will now be resolved by the CEC, which is expected to release its Final Staff Assessment later this month. A definitive decision, reached with a committee of two Commissioners and a Hearing Officer after a public comment and hearing period, should be reached by the first quarter of next year.