(Editor’s Note: this is the city’s release on the FAQ with the PDF attached).
City of Davis Signs Lease Option Agreement for Solar Farm
April 15, 2020 – The City of Davis announced today an update of a major step toward its climate action goal of becoming carbon neutral by 2040. The City has signed a lease option agreement with BrightNight, LLC, of El Dorado Hills. Under the agreement, BrightNight will have the ability to negotiate a lease for up to 235 acres of City-owned land near the City’s wastewater treatment plant on County Road 28H. The recent upgrade to the City’s wastewater treatment plant eliminated the need for this land as part of the treatment operation, so the land can now be used for another purpose.
At the February 11, 2020, City Council meeting, Mayor Brett Lee reported that the Davis City Council had directed staff to move forward with a preliminary agreement with BrightNight to lease the land for the project.
On March 24, 2020, a Lease Option Agreement with BrightNight was brought back to the Council for approval and was passed 4-1 after receipt of public testimony at the open meeting.
Click here to read FAQ: BrightNight Lease Option Agreement FAQ FINAL
After the diligence and option period is complete, a ground lease with BrightNight would be negotiated and brought back to the Council for consideration after BrightNight has secured all of its necessary and applicable entitlements from Yolo County and any other applicable agencies, including compliance with the California Environmental Quality Act (CEQA).
If the ground lease goes forward, this will allow for construction and operation of a solar and battery energy storage project and an associated research and development (R&D) facility.
If approved, this community project has multiple benefits including long-term lease revenue, increased renewable supply moving the City closer to carbon neutrality, clean and locally produced energy enhancing operational resiliency of the local power grid, and energy R&D and educational opportunities. This new solar project is projected to produce more than 66,000 megawatt hours of clean electricity every year, resulting in 11 million+ pounds per year of avoided carbon dioxide emissions.
Mayor Lee also announced that the Council will work with City staff and the developer to explore ways to directly power City buildings and facilities, like the wastewater treatment plant, with clean, low-cost solar power. “We are excited to be taking this important step toward our clean energy future,” said Lee.
In addition, the inclusion of energy storage in the proposed state-of-the-art project would enable it to deliver renewable energy at times when it will be needed most. The project requires a number of local and state of California agency approvals, but is scheduled to be completed in 2022.
“The Council recognizes that the large majority of our citizens favor clean energy. The approval to take the first steps with this project are an important signal to the community that we indeed intend to achieve our shared carbon neutral climate action goal,” said Mayor Lee. “In addition, it is gratifying to be able to re-purpose an existing piece of City-owned land to generate a very substantial amount of clean, renewable energy.”
“We’re excited to be working with the forward-thinking community of Davis to advance the City’s climate action plan, as well as position residents to add a cost-effective local energy supply source. We’re also looking forward to research and educational collaboration with the City and local stakeholders, including R&D sites,” said Martin Hermann, BrightNight Energy’s founder and Chief Executive Officer. BrightNight is partnering on this project with PVEL, a reliability and performance testing lab for solar project developers, financiers, owners, and operators.
Since the announcement of this clean energy opportunity that is in alignment with established City Council goals, inclusive of the Climate Emergency Declaration, there have been resident requests for more information related to the lease option agreement. For more information about the project, please follow the link provided here:
Sadly, this doesn’t address any of the questions raised by the community with regards to the lack of a competitive bidding process leading to a fair value determination of the value of the lease or any consideration of other possible uses for the land.
Ron
Agreed. Here’s our response to the City Staff, written by two members of the City NRC, both with extensive experience on different aspects of these issues. (This will be updated shortly.)
https://www.davisvanguard.org/2020/04/guest-commentary-citys-faq-on-the-brightnight-lease-option-is-misleading-and-factually-incorrect-part-1/
The City has the right intent, but that doesn’t excuse poor, mismanaged execution.
This press release put out by authorization of an unknown source within the City of Davis (there is no signatory to the FAQ) is a most unfortunate in that it attempts to ignore the poor condition that Council and Staff have left Davis. This City press release ignores dozens of complaints arising from the examination of the City’s process and the resulting solar lease option. The solar lease was negotiated almost entirely in closed door negotiations.
As it stands their is a potentially a million dollars of lost revenue a year because of a City Management, City Legal Counsel and some City Council Members who decided against an open process and are now in the unfortunate position of having also chosen to defend a badly arranged and apparently significantly sub-optimal deal.
Tia Will compares this situation to the successful reversal of the purchase of a military armed vehicle 6 years ago. There are significant, and I believe, more derisive circumstances here. A solar farm is something our community has deep resident knowledge about (the City failed to access that expertise); I don’t believe citizens are nearly so informed about armored vehicles. There is now a signed contract orchestrated by City management, not the Police Department, that enough of City leadership have decided to uphold, regardless of objection. So much so that the City is willing to put out press releases, like the one published in the Vanguard, that attempts to step over respectful request to reconsider the solar lease option deal and to do so in partnership not adversity. The City’s posture is a damaging precedent as to how a City’s leadership is to relate to its community when navigating the many difficult and far reaching infrastructure changes that will be necessitated by climate change.
A initially well intended, but mislead majority City leaderhsip is now using old school top down tactics to kick aside objections in the hope that enough citizens don’t care or can’t spare the time, due to the pandemic or otherwise, to apply enough pressure to hold them accountable.
I hope the are wrong. How we manage large land and energy assets are core to what matters to Davis citizens and “leadership” is about to find that out.
The following are comments about quotes from the above press release
” The City of Davis announced today an update of a major step toward its climate action goal of becoming carbon neutral by 2040. The City has signed a lease option agreement with BrightNight, LLC, of El Dorado Hills. Under the agreement, BrightNight will have the ability to negotiate a lease for up to 235 acres of City-owned land near the City’s wastewater treatment plant on County Road 28H.
– comment: There is no question that Davis wants to be carbon neutral as soon as possible and opposition to the BrightNight lease will not prevent Davis from realizing this goal. Allowing the Davis Utility Commission to provide criteria for a solar lease is what is needed. The City effectively locked out their own Utility Commission from negotiations. Think about how much more solar the City could subsidize with a million dollars more a year in the budget.
“The Council recognizes that the large majority of our citizens favor clean energy. The approval to take the first steps with this project are an important signal to the community that we indeed intend to achieve our shared carbon neutral climate action goal,” said Mayor Lee.
– comment: Objecting to the solar lease option negotiated in closed door sessions does not change the majority opinion in favor of clean renewable energy. The City’s press release is trying to suggest that objecting to the poorly negotiated solar lease is somehow obstructionist. Living with a poorly negotiated solar lease for half a century is not how to share our “climate action goal.”
“We’re excited to be working with the forward-thinking community of Davis to advance the City’s climate action plan, as well as position residents to add a cost-effective local energy supply source. We’re also looking forward to research and educational collaboration with the City and local stakeholders, including R&D sites,” said Martin Hermann, BrightNight Energy’s founder and Chief Executive Officer.
– comment: BrightNight is mostly one man, Martin Hermann, who has organized a two year old company that, if past Hermann companies are any indication, is concerned with maximizing profit by leveraging and then selling assets that happen to be solar farms. Hermann might have otherwise good credentials but in this case he took advantage of the lack of sophisticated negotiation only possible through a “closed door” process with the City of Davis. No one representing the City, in these closed door negotiations, had resident knowledge of the solar industry and Hermann had to know this.
Scott Steward Ragsdale
Hi David,
Well – I did mean what I printed in the comment section of the Vanguard last night, but realizing that it was midnight – I thought “I’m not going to print this now – I’ll wait until morning and re-read it.”
I made this decision after pressing “post” but only seconds after having done so. As far as I could tell I was successful – and my post was deleted as I had performed the deletion well before 3 minutes were up. Obviously not.
It is only a little unfortunate as it is not a letter perfect comment concerning a topic that is very serious as apparently there is a portion City leadership that thinks we all need to move on with a solar lease and for some reason cannot revisit the contract with Martin Hermann.
Because I have not felt the stakes to be so high for our City’s integrity since the armored vehicle incident, I want to be deliberate about what is written and while being stern with the portion of the City leadership that is orchestrating a bad process and has decided to carry that decision forward even if the resulting deal is decidedly flawed, I hope they can walk it back or that perhaps the deal is amendable since it is a lease option.
Can the term sheet be changed? Is Martin Hermann willing to change the terms sheet to allow the process the benefit of review and changes from an otherwise muzzled Davis City Utility Commission? I don’t know. But my words last night don’t capture this sentiment as well as I would have liked. It is mine to contend with.
I do think this is a story. You can’t eat electrons, but in the near future you won’t be able to cook without them and somewhere in this Davis City leadership has seriously lost its way, so much so that they are willing to lose $120 million in potential revenue and ignore 3 weeks of questions since the entire lease option agreement was made public.
Thank you for all that Vanguard is to our community.