Tuesday, May 24, 2011

Gainesville Florida Solar Program Applications Illegal?

When Gainesville Regional Utilities reopened its solar feed-in tariff program for applications at the beginning of the year, the utility received 136 applications that, if all were awarded, would have added more than 9 megawatts to the grid, nearly a tenth of the production capacity of the forthcoming biomass plant.

But with solar energy being more expensive, the utility limited this year's new solar capacity to 2.7 megawatts and asked a University of Florida professor to randomly select the winners.

Now, three months after the selections, some local solar companies and a former member of the state Public Service Commission, which regulates utilities, are calling on the city to void a number of the awarded projects because, they say, the applications were incomplete — and possibly illegal.

After the issue and allegations were raised Thursday at City Hall, the City Commission unanimously voted to have the city auditor investigate the application process for the feed-in tariff. The program was the first of its kind in the country when it began in 2009 to model some European systems that pay property owners for the energy their solar panels produce.

Nathan Skop, a lawyer and Gainesville resident whom the Legislature removed last year from the PSC in a move some observers have questioned, said the company that has an agreement to install systems at various schools — Solar Impact Inc. — has “stacked the deck,” namely by submitting applications for systems under unregistered limited-liability corporations.

Of the 37 unregistered LLCs that submitted applications to install a solar project at a school, 10 were registered after the fact — the 10 that were selected in the lottery.

GRU and Solar Impact officials defended the process, saying they communicated about what was — or what wasn't — required. GRU General Manager Bob Hunzinger told commissioners he had “briefly reviewed the process and (thinks) that it was equitable in the way it was conducted.”

Hunzinger also cited a guideline that states a governmental or nonprofit applicant can get more leeway in the process because of the often-complicated process for contracts in the public or nonprofit sectors. That comes into play, he said, because of Solar Impact's deal in place with the Alachua County School Board.

As early as 2009, the School Board was looking for a firm to get the district into the FIT program. Members chose Solar Impact with the understanding it would build the rooftop systems and sell off the LLCs that are renting the space from the district and selling the solar energy back to GRU.

Because Solar Impact is a for-profit company, Skop said the guideline Hunzinger cited shouldn't apply. The deal with the School Board, he said, should not come into play because the property owner is immaterial — it's the applicant for the project that matters.

Further, he said, doing business as an unregistered LLC — which, he contends, is what Solar Impact officials did — is against state law.

The City Commission expressed concern, too.

“I think that's something we should take very seriously,” Commissioner Thomas Hawkins said before making a motion to forward the issue to the auditor. “If the process was arguably inadequate, we have got to fix it.”

But if it was inadequate, it wasn't clear whether there would be any redress for this year's jilted applicants.

Was process equitable?

Barry Jacobson, the president of Solar Impact, said he doesn't think any redress will be necessary.

Jacobson said he asked GRU officials if he could register the LLCs if and when his projects were selected and that they said yes.

Kathy Viehe, GRU's assistant general manager for customer support services, said the same thing. “Once the lottery was completed, he could go out and get the LLCs, and we would complete the paperwork,” Viehe said, adding she was confident that if GRU had said the companies had to be registered to apply, Jacobson would have done so.

Annie Orlando would have liked to have known that, too.

Orlando submitted an application to install a 100-kilowatt unit on the roof of her Atlas Screen Printing and Embroidery shop on Southeast 10th Avenue.

Beforehand, she registered her own LLC — Khepera Solar — and paid the hundreds of dollars' worth of deposits and application fees.

She said she felt her status as a small-business owner made her an ideal candidate but said she understood the risk that she wouldn't get picked.

“I was like the poster girl for this program,” Orlando said. “I'm feeling like this was a scam.”

Jacobson said GRU was comfortable with the way he completed the applications, adding that there was some “financial motivation for other people to try to knock us out” of the program.

“It wasn't anything underhanded or anything like that,” he said. “It's such a win-win I hate to hear anything negative about it, but no good deed goes unpunished, I guess.”

‘On the up and up'

Ed Gable, the school district's facilities director, said he and the district's attorney met last week with Skop and will be discussing the matter with GRU.

“We want to get all that squared away,” Gable said, “and be on the up and up.”

While the lease still is being negotiated, Gable said he expects the district to get about $72,000 a year through the arrangement for the next two decades.

At Thursday's meeting, Alex Khokhlov, of Power Production Management Inc., estimated that the various school project applications could cost solar companies like his and business owners like Orlando $10 million.

Wayne Irwin, the president of Pure Energy Solar, praised the feed-in tariff program but said the Solar Impact applications were incomplete, putting him and his clients at a disadvantage.

“Please correct this mistake,” Irwin said. “Don't let this go on. It's a great program if it's executed properly.”

SOURCE: http://www.gainesville.com/article/20110508/ARTICLES/110509529/-1/news?p=1&tc=pg

No comments: