A state senator wants to crack down on no-bid contracts between public agencies and solar companies, saying the practice may waste millions of tax dollars per year. Prompted by reporting by Bay Area News Group, Sen. Leland Yee, D-San Francisco, said he planned Thursday to introduce a bill that would require cities, school districts and other agencies to seek competitive bids on energy contracts.
A 1983 law exempted those projects from the kind of bidding required on other contracts. Yee said Wednesday he was motivated, in part, by reports that Chevron Energy Solutions had plied officials at the Mt. Diablo Unified School District with drinks and golf discounts as the company worked to secure one of the nation's largest school solar-power contracts.
Following the news reports, the district decided against a no-bid contract and signed an agreement with SunPower Corp. after a bidding process. "Sole-source contracting is just fraught with problems," Yee said. "It just creates the sense that there is some underhanded dealing going on."
In 2009, the Oakland-based Peralta Community College District signed a no-bid contract with Chevron Energy Solutions -- an arm of the San Ramon oil giant -- despite indications a bidding process could have saved the district $1.5 million.
A Chevron spokeswoman declined to comment on Yee's proposal, saying the company needed more time to evaluate the bill. Proponents of the bidding exemption say it allows public agencies to move quickly on solar projects, allowing them to take advantage of lucrative power-company incentives and tax credits. Critics say the law gives large companies such as Chevron an unfair advantage in what has become a more competitive solar market.
The law was introduced by then-Assemblyman Gray Davis, who has since said it should be repealed. The former governor did not respond to a phone message Wednesday. It is difficult to predict whether Yee's proposal would save money, said Steven Weissman, a UC Berkeley law professor and former administrative-law judge with the California Public Utilities Commission. Public officials should be responsible when spending tax dollars, he said, regardless of bidding requirements. "It really starts as a matter of local governance," he said.
Public agencies "are responsible to the voters." Some who have supported solar bidding nevertheless appear anxious about the bill.
A bidding requirement could make innovation difficult in the California solar market, said Sophie Akins, a San Diego attorney who has worked with school districts on solar contracts. The lack of bidding sometimes allows public agencies more flexibility and makes it easier to find qualified solar companies, Akins said. "I think it would have a chilling effect on solar projects around the state," she said. "You wouldn't want to eliminate the creativity that comes from the private sector." Yee countered that such concerns are "bogus arguments." "We're talking about the integrity of public dollars," he said. "We should have a process with integrity and honesty." Matt Krupnick covers higher education. Contact him at 925-943-8246. Follow him at Twitter.com/mattkrupnick.