San Jose is poised to make history as the biggest city in the nation to outlaw natural gas from pretty much all new construction.
But environmental sustainability advocates are imploring city leaders to reject a last-minute exemption that they say would undermine an otherwise exemplary climate-smart policy—the strongest of its kind in the U.S.
The proposal, which comes up for a vote at today’s City Council meeting, would prohibit fossil fuels in future commercial and residential high-rise buildings starting next August. It builds off an ordinance in place since the start of the year that bans on natural gas in new single-family homes, granny flats and one-to-three-story multi-family complexes.
As written, the revised ban would exempt hospitals, residential units added onto existing homes and food-service establishments and manufacturing facilities experiencing financial hardship through the end of 2022.
However, one recommended exemption has drawn fierce backlash from environmental groups. That’s the carve-out for facilities that generate and store energy on-site with grid-linked systems—an exception that would benefit one company in particular.
Bloom Energy—a publicly traded fuel cell manufacturer that overturned a similar ban in neighboring Santa Clara—wants San Jose to give it a pass from its all-electric code.
That the firm’s natural gas-powered fuel cells can provide backup energy in event of an outage, like the rolling PG&E blackouts that left hundreds of thousands of South Bay residents without power earlier this year.
The San Jose-based energy company—represented by Mayor Sam Liccardo’s close friend, ex-Silicon Valley Leadership Group CEO Carl Guardino—managed to convince the city to weigh the exemption by arguing that an outright ban on its natural gas pipelines would hamper California’s broader efforts to fully decarbonize.
“The roadmap to meeting the state’s carbon-reduction goals should include a variety of policies and technologies to enable a clean, reliable and affordable transition,”Guardino, Bloom’s executive vice president of government affairs and policy, wrote in a letter to the council. “Intermittent renewable resources must be paired with reliable generation to keep the lights on and business running.”
The Bloom exemption was proposed on Nov. 16, a day before the council was set to vote on the expanded natural gas-ban. Ultimately, and in no small part because of pressure from climate-conscious groups, the council decided to table a decision to allow for more time to learn about Bloom’s fuel cell technology.
With the council now on the brink of that vote, sustainability advocates from Mothers Out Front, Climate Reality and 350 Silicon Valley—to name just a few—are escalating their pleas to deny Bloom’s pitch for special treatment.
“We think the city’s all-electric policy is a gold star—it’s exactly the kind of climate leadership that we need the capital of Silicon Valley to display,” Linda Hutchins-Knowles, a member of Mothers Out Front, told San Jose Inside. “But if they approve the exemption, that will set a bad example for other cities and basically give companies an end-run around the natural gas ban.”
In a letter opposing the exemption, environmental groups united under a coalition called the Campaign for Fossil Free Buildings in Silicon Valley disputed city staff’s claims in a Nov. 16 memo about the usefulness of Bloom’s fuel cells as an emergency energy source.
The climate-action coalition argued that fuel cells aren’t economical to run in a power outage—the stated rationale for Bloom’s exemption.
Plus, the letter went on to state, the company’s natural gas-fed fuel cells, described by Forbes magazine as “too dirty and too costly,” typically cause three times as much carbon pollution as the city’s fledgling electric utility, San Jose Clean Energy (SJCE).
“We therefore [are] strongly opposed to any exemptions allowing significant continuous fossil gas use in place of cleaner SJCE (or PG&E) electricity in new construction,” the 35-member coalition wrote. “Any blanket exemption in this vein would severely undermine the intent of the proposed gas prohibition. The late attempt of a fossil fuel company to tamper with this policy is inappropriate.”
In a follow-up letter sent on the eve of today’s council vote, Mothers Out Front teamed up with the Sierra Club to commend the city on its overall policy and condemn the Bloom loophole, which the city, by way of a new memo from Environmental Services Director Kerrie Romanow, suggested extending even longer than originally planned.
“We … were very disappointed with the supplemental memo of Nov. 25,” the environmental groups wrote. “Rather than responding to our concerns about this exemption, the exemption is now being proposed through the end of 2024: four entire years! In climate years, this is an eternity.”
Considering that about 14 commercial projects a year break ground in San Jose, the groups continued, that would lock in hundreds of thousands of additional tons of carbon pollution a year for at least a decade to come.
“Our other concern with all this is how Bloom jumped into this conversation so late,” Hutchins-Knowles said in a phone call Tuesday morning. “They didn’t participate in prior discussions, and even if they weren’t directly invited to the stakeholder meetings on this issue, they knew they were taking place. We think this was deliberate, an attempt to go under the radar and squeeze this in at the 11th hour.”
The City Council meets at 1:30pm today. Click here to read the agenda.