COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON THE ENVIRONMENT3 Room 400, City Hall6 Philadelphia, Pennsylvania Wednesday, October 26, 20117 2:20 p.m. PRESENT: COUNCILMAN JAMES KENNEY, CHAIR10 COUNCILMAN CURTIS JONES, JR. COUNCILWOMAN BLONDELL REYNOLDS BROWN11 COUNCILMAN FRANK RIZZO, JR. BILL 110442 - An ordinance amending Chapter 19-2600 of The Philadelphia Code, entitled14 "Business Privilege Taxes," by changing the reporting requirement related to the15 Sustainable Business Tax Credit... BILL 110533 - An ordinance amending Subcode "A" (The Philadelphia Administrative Code) of17 Title 4 of The Philadelphia Code, entitled "The Philadelphia Building Construction and18 Occupancy Code," by providing for the manner of payment of electrical permit fees for the19 installation of solar electric (also known as photovoltaic) systems.20 21 - - -22 23 24 25 2 1
Ladies and2 gentlemen, can I please have your3 attention. The Committee on the4 Environment is now in session to conduct5 a hearing on two bills. The first bill6 we have -- by the way, we have a quorum7 today with Councilman Rizzo,8 Councilmember Reynolds Brown and9 Councilman Curtis Jones and myself,10 Councilman Kenney, as the Chair.11 We will hear two bills today.12 The first is Bill No. 110442, which is an13 ordinance amending Chapter 19-2600 of The14 Philadelphia Code, entitled "Business15 Privilege Taxes," by changing the16 reporting requirement related to the17 Sustainable Business Tax Credit; all18 under certain terms and conditions.19 Bill No. 110533, an ordinance20 amending Subcode "A" (The Philadelphia21 Administrative Code) of Title 4 of The22 Philadelphia Code, entitled "The23 Philadelphia Building Construction and24 Occupancy Code," by providing for the25 3 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 manner of payment of electrical permit2 fees for the installation of solar3 electric (also known as photovoltaic)4 systems.5 The first witness on our list6 is Alex Dews, Mayor's Office of7 Sustainability.8 (Witness approached witness9 table.)10
Please11 identify yourself for the record and12 proceed.13
Good afternoon,14 Chairman Kenney and members of the City15 Council Committee on the Environment. I16 am Alex Dews, Policy and Program Manager17 for the Mayor's Office of Sustainability.18 I am here to testify in support of Bill19 No. 110442, which was introduced by20 Councilman Kenney and amends the21 reporting requirement for the Sustainable22 Business Tax Credit passed by Council in23 November 2009. The Sustainable Business24 Tax Credit grants an exclusion from the25 4 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 definition of receipts for the business2 privilege tax any receipts from certified3 sustainable businesses.4 As you know, the Mayor's Office5 of Sustainability is responsible for6 implementation of Greenworks7 Philadelphia, the City's comprehensive8 sustainability plan. Greenworks sets9 measurable goals in the areas of energy,10 environment, equity, economy and11 engagement. The Sustainable Business Tax12 Credit, which takes effect beginning in13 2012, formally acknowledges sustainable14 business practices in Philadelphia and15 encourages the growth of the local clean16 economy by offering a $4,000 per year tax17 credit to certified sustainable18 businesses.19 This bill merely changes the20 responsibility of administering the21 application process and meeting the22 annual reporting requirement for the23 Department of Revenue to the Mayor's24 Office of Sustainability. The first25 5 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 round of applications for the Sustainable2 Business Tax Credit will be available on3 April 15th, 2012, with an application4 deadline of October 15th, 2012. The5 first 25 certified sustainable businesses6 can claim the tax credit when they file7 2012 taxes the following spring. The8 Mayor's Office of Sustainability will9 deliver its first written report to the10 Mayor and to the Chief Clerk of Council11 summarizing the experience with the12 Sustainable Business Tax Credit by13 December 31st, 2013.14 Thank you for this opportunity15 to testify regarding this bill. I will16 be happy to respond to any questions at17 this time.18
Does the19 Office of Sustainability have any20 preliminary estimate on the effectiveness21 of this or are there companies that are22 expressing interest and to what level?23
Currently there are24 about 35 businesses that are certified in25 6 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 the Philadelphia region. Within the City2 proper, that number is right around 20,3 but I know that there are a number of4 businesses who are in the process of5 certification right now. So we expect6 there to be 25 applicants at least at the7 time that the applications become8 available.9
And do you10 have off the top of your head, do you11 know a ball park figure on the number of12 employees, the aggregate of those 20, 25?13 If you don't know, you don't know.14
I don't know. I'd15 be happy to report back. I think that16 it's tough to say off the top, just17 because the kinds of businesses we're18 talking about range from relatively small19 employers, one or two person shops, to20 some larger employers.21
Okay.22 Great.23 Anyone have any questions for24 Mr. Dews?25 7 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 Councilwoman Reynolds Brown.2
Good3 afternoon. Please, if you would, just4 give us an update on the staff5 composition of the Office of6 Sustainability. It's how many years old?7
Been around since8 2008. Greenworks was put in place 2009,9 and we have issued now two progress10 reports on the progress that we've made11 to date with the plan. We are --12 Katherine Gajewski is the Director of the13 office; myself, Policy and Program14 Manager; Sara Wu, who is Outreach15 Communications Director; and Kristin16 Sullivan recently moved from our office17 over to the Mayor's Office of18 Transportation and Utility, but still19 shares some duties with Solar America20 Cities; and Adam Agalloco, who is the21 Energy Conservation Coordinator.22
We share a floor25 8 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 with the City Planning Commission, One2 Parkway Building, 13th Floor.3
We are just coming6 off some funding from the Energy7 Efficiency and Conservation Block Grant8 rolling on to General Fund. I don't have9 specifics with me, but I'd be happy to10 report back.11
Yeah. If12 you could please report that information13 to the Chair and a breakdown of the14 office.15
Just for the21 record, Mr. Dews is one of the success22 stories of the City of Philadelphia,23 educated in Philadelphia at Philadelphia24 University, interned in City government25 9 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 and decided to stay and raise his family.2
Oh, that5 would be the Councilman from the 4th6 Councilmanic District, Curtis Jones.7
Thank you,9 sir.10 Any other questions?11 (No response.)12
Anyone else16 to testify on this bill?17 (No response.)18
Seeing19 none, we will move to Bill No. 110533 and20 we would ask Kristin Sullivan and Maura21 Kennedy.22 (Witnesses approached witness23 table.)24
Now you'll have25 10 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 to guess which one is Kristin and which2 one is Maura.3
My name is John10 Young representing the Department of11 Licenses and Inspections. Thank you.12
Good afternoon,13 Chairman Kenney and members of the14 Committee on the Environment. I'm15 Kristin Sullivan, Energy Manager for the16 City of Philadelphia in the Mayor's17 Office of Transportation and Utilities,18 as well as the Program Director for the19 DOE-funded Philadelphia Solar City20 Partnership Program. I'm here to testify21 on Bill No. 110533, which was introduced22 by Councilman Kenney and proposes changes23 to the electrical permit fee structure24 for solar energy projects.25 11 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 I'm excited about this2 particular legislation, and I thank you3 for this opportunity.4 Target No. 4 of Greenworks5 Philadelphia, the City's comprehensive6 sustainability plan, is to purchase or7 generate 20 percent of electricity used8 in Philadelphia from alternative energy9 sources. Adopting a slightly altered fee10 structure will help move Philadelphia11 closer to this goal by providing a12 reprieve for business owners, residents13 or other entities that want to build14 larger-scale solar projects throughout15 the City of Philadelphia.16 The Mayor's Office of17 Transportation and Utilities, along with18 the Department of Licenses and19 Inspections and the Mayor's Office of20 Sustainability, worked with Councilman21 Kenney's office to propose amendments to22 this legislation in order to address our23 concerns regarding deferring permit fee24 payment to a later date.25 12 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 The proposed amendment to this2 bill seeks to reduce permitting fee costs3 for solar projects built in the City by4 modifying the existing fee structure for5 electrical permits. The modification6 excludes the cost of solar panels and7 inverters in what's called the8 "construction value." Eliminating the9 cost of the panels within the10 construction value creates a more11 reasonable fee structure. The core12 intention of the bill is to provide a13 reprieve for mid-scale solar projects14 that are too large to take advantage of15 the residential electrical permit fee16 structure but too small to absorb the17 electrical permit fee costs easily.18 In discussing the possibility19 of providing a more effective option to20 Bill No. 110533, it was agreed that it is21 best to simply adopt a restructured fee22 for all solar projects. The reduction in23 fees will not adversely affect the City's24 revenue stream on any significant level.25 13 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 Providing this reduction in2 permit fee costs can help offset the3 current struggles in the solar market.4 To further add difficulty to these5 struggles, Pennsylvania's Solar Renewable6 Energy Credit market is what many have7 been tagging as suffering from success.8 The solar industry answered the call of9 the Pennsylvania Alternative Energy10 Portfolio standard with a resounding11 reaction and provided more than enough12 SRECs, Solar Renewable Energy Credits,13 for state compliance. This success has14 caused a market slump, making third-party15 financing very difficult for mid- and16 large-scale projects.17 Supporting solar energy18 installations in Philadelphia provides a19 multitude of benefits for the City,20 residents and the region. More solar21 installations within the City will22 increase distributed generation, which23 reduces the need for conventionally24 fueled generation, reduces grid25 14 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 congestion during high peak times, which2 is when solar installations are most3 likely providing electricity, and reduces4 emissions regionally. Furthermore, solar5 provides an important visual indication6 of the City's commitment to7 sustainability.8 Thank you very much, and I'm9 happy to answer any questions.10
Thank you.11 Could you please, if you have12 testimony to offer, could you offer it13 now and then we'll --14
You're just16 here for assistance, you're here to17 answer questions?18
Good22 afternoon. Just share with us how long23 you've been with the Administration, how24 long you've been with the Department and25 15 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 just a little bit about your work.2
And let me4 state why I'm asking these questions.5 Because this is one of the newest6 departments in government, and like all7 departments in government, we want it to8 at some point look like Philadelphia.9 And so having some help as to how it's10 being framed out, because we know that11 you have to work hard to get funding,12 unlike civil service, which has its own13 separate set of challenges when it comes14 to growing an office that looks like15 Philadelphia.16
Well, great, and17 I appreciate the opportunity to tell you18 the different things that I'm working on.19 I started with the City in20 October of 2008 working through a21 grant-funded program, the Solar City22 Partnership Program. So it was23 originally funded by the Department of24 Energy. I moved in to that position25 16 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 doing about 25 percent of my work was2 solar related and 75 percent of my work3 was energy procurement, demand response4 programs, working on our utility bill5 management system, trying to get6 something up and running. So since7 October 2008 until about six months ago,8 I was working and housed in the Office of9 Sustainability, and then just recently I10 moved over to the Mayor's Office of11 Transportation and Utilities, because the12 energy procurement piece is a pretty huge13 piece of energy management, and so I took14 along with me the demand response15 program, which we earned approximately --16 we had revenue of almost a half a million17 dollars in that particular program, which18 is curtailing our energy use during those19 hot summer days. So that particular20 program brings in money, which has helped21 the Office of Sustainability and Mayor's22 Office of Transportation and Utilities23 with -- in terms of looking at ways we24 can actually bring in revenue and earn25 17 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 money and have savings from energy2 efficiency.3 So that's where I am today. I4 still work on solar quite a bit and it's5 always in my heart even though I do a lot6 more energy procurement.7
Thank you,16 Mr. Chairman.17 As Chair of Transportation and18 Public Utilities, if you could forward me19 just a state of the union kind of where20 you are, how things are going, what21 direction you're trying to move in, that22 would be helpful to me.23 Let me pose a hypothetical,24 theoretical question. As we approach25 18 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 next year's budget cycle in January, is2 it a reasonable expectation if we as3 Council, as we review each department,4 made a demand of, particularly for5 departments that have high energy6 consumption, to say to them that you have7 a mandate now to reduce your energy8 consumption by 5 percent? And I'm just9 grabbing that out of the air as a figure.10 Is there a reasonableness to that demand11 both from the fact that we want to be12 environmental -- good environmental13 stewards, but also from the fact that14 last I counted we had 1,500 electric15 accounts and $85 million worth of16 electric bill. Is that something that17 would be an unreasonable demand from this18 body?19
You're20 absolutely right in those numbers, and I21 definitely appreciate that question and22 intention. Right off the bat, I say yes,23 it's reasonable that we ask that.24 However, we can't ask departments to do25 19 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 something unless we're providing them2 with measurable data, data that they can3 look at and start to see what are our4 trends from this year to last year.5 So we are working right now on6 a monthly department-by-department report7 that we are going to start on with the8 larger departments and understand just9 what kind of manpower it takes for us to10 create those reports every month. But we11 just installed a new database. We12 established a new database where we have13 this data at our hand. What the big14 issue has been is that it has never been15 reader friendly. It has never been user16 friendly. So we've really tried to focus17 on a better user interface, more18 graphics, so that facilities, personnel19 and commissioners can really take a quick20 look at it and say where were we last21 year this month and where are we this22 year this year.23 So we are developing that24 report as we speak. We actually expect25 20 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 to have a final draft of that for review2 in the next two or three weeks.3
One of the4 things that we've always done as a body5 or even the executive branch, they6 measure employment. They measure things7 like consumable supplies. They measure8 these things, but we don't measure energy9 consumption. And I can't begin to guess10 why we never did that, but maybe now that11 we are a lot more conscious about it,12 that might be a standard measurement that13 we hold departments accountable to and14 something that we look at in the budget15 cycle.16
I agree. I17 think coming from my perspective, I would18 appreciate that. And I think when we19 have such a centralized way that we pay20 bills, it's difficult to tell departments21 to take action and spend some of their22 own operating money if they're never23 going to see the savings, because we see24 it centrally.25 21 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331
That's -- I2 mean, we face that -- and I won't belabor3 this, Mr. Chairman, but we face that with4 the courts. We demanded that they reduce5 the number of inmates, and they did, and6 now the biggest issue now is that they7 don't realize -- it goes into the General8 Fund, and we all appreciate that, but9 they would like to realize some of those10 savings and be able to use them for11 further programs that they want to do.12 Similarly, each department13 maybe, if you're the Recreation14 Department -- and I don't know,15 Councilwoman Brown, how many rec16 departments we have in the City of17 Philadelphia, but there's maybe 20 in my18 district. Multiply that by ten, that's19 significant. You're talking real money20 then.21
We have almost22 700 of our accounts are parks and rec,23 and so --24
Seven25 22 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 hundred of those accounts?2
But I would love5 that opportunity to talk with your staff6 to brainstorm on how should we best7 approach this as effective, considering8 the setup that we have, how it's9 systematized.10
In the11 future, January, when other departments12 ask, Well, where did this measurement13 come from, I'm going to point them right14 at you.15 MS. SULLIVAN:16 KristinSullivan@Phila.gov.17
Councilman21 Jones, it's interesting that you touched22 on that. Not too long ago I was riding23 on a snowy night past a recreation center24 and all the lights were on. The fields25 23 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 were covered with snow, and every light2 in the center was on. So the obvious3 thing is, you pick up the phone the next4 day and you call the Recreation5 Commissioner. Well, I'm not going to6 identify who that Commissioner was, but7 this was the answer: I don't pay that8 bill, so it's not an issue for me.9 Public Property pays the bill.10 There's no incentive for our11 operating departments to reduce their12 energy costs because it's not impacted in13 their budget. In most corporations14 today, departments are responsible as15 part of their budget is their electric16 utility. That's where you need to go.17 You need to go so City Council pays their18 light bill, the Recreation, Police, Fire,19 and you could bet there would be an20 effort to try to reduce that electric21 consumption. Because of the way we do22 business, no commissioner, no deputy23 mayor is motivated to do anything other24 than, yeah, it's a good thing, but I'm25 24 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 not going to spend a lot of time, because2 there's no impact on my department.3
So I can't9 figure why we can't develop a process10 that that money is put into the11 department's budget and each month they12 are debited for that amount. And guess13 what? If they can keep the money that14 they save, they'd be motivated to reduce15 the energy costs.16
Those rec18 fields covered with snow in the middle of19 January is mind-boggling to the20 taxpayers.21
I'm sure if23 it got my attention, it certainly gets24 theirs. And the answer was that we have25 25 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 the lights lit for security reasons, that2 we don't have a way to only light a few,3 that -- you know, one excuse after the4 other, other than we need to do something5 on that.6
Absolutely. And7 I think, if I could just take a second to8 respond, just short of de-centralizing9 the billing, which while I have my gripes10 about a centralized system, it does have11 its pros as well, in that it's easier to12 track the whole entire City, especially13 as we come upon climate action plans and14 climate disclosure projects, to be able15 to see everything in one and also make16 sure our bills are getting paid faster,17 which really reduces the cost of capital,18 that cost of carry for that capital, and19 it's ultimately cheaper electricity and20 cheaper natural gas.21 So to have that central control22 is really nice in a lot of ways, but what23 we're trying to do just short of24 de-centralizing is to really engage each25 26 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 department and looking at exactly that.2 If you do need security lights, let's3 talk about investing a little bit of4 money with some grant funding, with some5 possible operations money and we put6 security lighting there and then we put7 timers on the larger lights and, again,8 also switching out the current lights,9 the sodium lights, to LED lights, things10 like that.11 So we're working at different12 angles and trying to take bigger bites13 than maybe we have in the past. So I'll14 definitely keep you posted on that, but I15 agree a hundred percent, we need to do it16 better.17
Thank you.20 Any more questions for these21 witnesses?22 (No response.)23
Thank you24 very much for your testimony.25 27 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 I'd like to call Micah Gold,2 Bertha Sarmina, Andrew Kleeman and Ron3 Celentano.4 (Witnesses approached witness5 table.)6 MR. GOLD-MARKEL:7 Unfortunately, we're only two today.8
Okay.9 That's fine. Please identify yourself10 for the record and proceed.11
Good12 afternoon, Chairman Kenney and members of13 the City Council Committee on the14 Environment. My name is Micah15 Gold-Markel and I am the Founder and CEO16 of Solar States. Solar States is the17 premiere provider of power purchase18 agreements in the City of Philadelphia.19 A power purchase agreement is when we20 provide power to a specific building or21 property owner and we do that through the22 production of solar energy.23 Currently, we own and operate24 the largest rooftop solar array in the25 28 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 Center City Philadelphia area. It's an2 81 kilowatt solar array. It's located at3 1400 North American Street. It involves4 over 400 solar panels, and it was over a5 half a million dollar project, and we're6 very proud of the success that we've seen7 there. It's been operating for over six8 months now.9 We have quite an exciting10 pipeline ready in the City of11 Philadelphia, and we're here to testify12 that if we can just get our costs down13 ever so slightly, we will be able to14 execute this pipeline.15 Solar is a very low-margin16 business at the moment and, as was stated17 earlier, the SREC market is severely18 depressed in the State of Pennsylvania.19 Because of this, any cost savings that we20 can see will help us move forward with21 the pipeline that we have in place.22 Additionally, the State of23 Pennsylvania and the City of Philadelphia24 are facing stiff competition from the25 29 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 surrounding states. Both New Jersey and2 Massachusetts have much better3 marketplaces in terms of SRECs and4 compliance laws than the State of5 Pennsylvania.6 I'm a lifelong Philadelphian.7 I have no interest in going to New Jersey8 or Massachusetts to succeed. I would9 like to succeed here. In order to do10 that, we have to have streamlined L&I11 processes that are reasonably priced.12 For mid-range solar installs, we're13 looking at sometimes above 2 percent of14 the cost of the project going to the15 electrical permitting. This is out of16 line with the industry standard.17 On top of this, we employ a18 number of folks from a broad spectrum of19 backgrounds when we do solar20 installations, from the folks who are21 driving our materials to the job site to22 those who are installing, to those who23 are engineering. Solar installations24 have many benefits across a wide range of25 30 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 our economy. Making more solar energy is2 not just good for the environment, it's3 good business, and we want to do more of4 it in Philadelphia.5 I would compare solar energy to6 the early days of the pharma industry.7 Very few people knew about8 pharmaceuticals or how important they are9 in our society today, and now10 Philadelphia is known, not just11 nationally but throughout the world, as12 being a hub for pharma companies. Solar13 can do the same thing for Philadelphia.14 We can become a world leader in this15 industry, and I truly believe that, a16 world leader. And it can have a very17 similar effect to the pharma industry,18 that the global market for this product19 is huge. It is huge. And if we can20 focus that energy, so to speak, pardon21 the pun, in Philadelphia, we can be very22 successful.23 I'd like to take a moment now24 to thank the Mayor's Office of25 31 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 Sustainability and particularly Kristin2 Sullivan for their work in distributing3 information about solar and what needs to4 be done in terms of cooperation with the5 City of Philadelphia. Their information6 has been critical to the success of our7 projects thus far, and I think that8 without them, it would be much more9 difficult to accomplish our goals in10 terms of getting solar energy throughout11 the City.12 Thank you for this opportunity13 to testify regarding this bill, and I'm14 happy to respond to any questions at this15 time.16
Well, we17 thank you for your testimony and for your18 forward thinking, if I may.19 Let's hear all of the testimony20 and then we'll open it up to questions.21
Good afternoon,22 Chairman and members of the Committee on23 the Environment. My name is Bertha24 Sarmina and I'm here to testify on Bill25 32 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 No. 110533, which was introduced to2 propose changes to the electric permit3 fee structure for solar energy projects.4 I work for Finanta, which is a non-profit5 community development financial6 institution. We're a community lender.7 We have been working with Solar States8 both as an investor, partner and as well9 as looking to finance solar energy10 projects throughout the Philadelphia11 region. We're fortunate in that we have12 some capital available to do so, but we13 would be very interested in seeing the14 fee structure come down and any costs15 come down. We've seen reduction in some16 of the pricing just over this past year17 since we've been working with Solar18 States, and we'd like to see some of19 those costs continue to come down,20 because as a lender, well, it helps us be21 able to underwrite and provide the22 capital for these projects if they're23 more affordable, if they're more24 accessible to more people, both on a25 33 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 residential and commercial level.2 We're also very interested in3 developing some spaces in the American4 Street area. Our organization was5 formerly the American Street Financial6 Services Center, and we're very invested7 in the American Street corridor area and8 we're looking to continue to invest in9 that community. And so if we could bring10 costs down, we're certain that there11 would be more people and more businesses12 interested in solar energy systems in the13 area and throughout Philadelphia.14
Thank you15 as well for your testimony.16 Any questions from members of17 the Committee?18 Councilman Jones.19
Thank you.20 It was interesting to see a21 special on TV that talked about the22 production of these panels and where they23 go. We had a facility, the Arthur Ashe24 Tennis Center, which just wired its solar25 34 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 panels in and we flipped the switch.2 They told me that it would result in 503 percent less energy consumption,4 electrical bills, the like, on that5 facility, which I think is substantial6 when you consider the amount of energy7 they use.8 Will we stay on the cutting9 edge of producing these panels and what10 is the likelihood of Philadelphia11 actually manufacturing and creating jobs12 out of this industry? What's your vision13 on that?14
Well,15 actually, it's interesting you say that.16 An article just came out in the New York17 Times that the solar industry is one of18 the few industries left in America that19 is a net exporter, and that's impressive.20 I can't say that enough. There are so21 many industries where we import way more22 than we export. Now, most of that comes23 from the manufacturing of something24 called ingots.25 35 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 The way that solar panels work2 is, they're very thinly sliced silicon3 wafers inside of the panel, and in order4 to get those wafers, you slice ingots,5 laser slice them. I think there's6 tremendous opportunity in the City for7 manufacturing of ingots.8 In terms of the manufacturing9 of the entire panel itself, that's going10 to be very difficult unless things change11 at the federal level.12
Because the14 competition from overseas, particularly15 China --16
That's17 what -- I wasn't going to say that, but18 I'm glad you brought it up.19
The assembly20 of panels in China -- and there's a big21 mistake being made here too, which is22 people think that the Chinese23 manufacturing is cheaper because labor24 costs are lower. This is not the case.25 36 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 With the manufacturing of solar panels,2 it's mostly automated. It's mostly3 machine done stuff. However, there's4 much more support on a federal level in5 China than there is in America. They6 have access to billions of dollars of7 credit at extremely low rates that we8 just can't find here in America.9
The story10 went that there was an innovator in this11 regard and he had to make a decision as12 to where he would make a commitment,13 asked the federal government several14 times to participate in his business15 venture, and eventually China knocked on16 the door and said, Hey, we'll build it17 and you can come.18
That's right.19 That's correct. A guy by the name20 Dr. Shi. He's the head of the largest21 solar manufacturer in the world. He was22 studying in Australia. He was looking to23 open up a factory, and let me tell you, I24 visited the factory in China, Suntech.25 37 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 It is impressive. It is a very2 impressive facility.3
So bringing4 this back to River City here, how would5 this legislation be helpful?6
This7 legislation would be helpful because it8 takes baby steps. If we want to have the9 solar industry here, we have to have an10 environment that's friendly to solar11 installation. Once we accomplish that12 and we start showing that we're a leader13 in solar energy production, that we have14 a number of large arrays throughout the15 City -- the Water Department did a great16 job putting in an over 200 kilowatt17 array, and, again, the Mayor's Office of18 Sustainability is very forward thinking19 in trying to lease City land for the use20 of this.21
And our22 Chairman of the Environmental Committee23 was all on top of this, by the way.24
Right. I25 38 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 mean, these are the ideas that are going2 to get us there.3 This is a small step. We need4 to make sure that our permitting and L&I5 fees from mid-size installations are in6 line with the industry so that we can get7 more of them. Once we get more of them,8 then we'll attract more attention.9
Thank you12 very much.13 And thank you, Vice-Chairman,14 for chairing the Committee while I was in15 the hallway.16 I just want to give you a17 little bit of history of the bill. Micah18 and I met in a bowling alley, Northern19 Liberties. I was introduced, sitting at20 the bar stool, and he explained to me21 this issue, which came now to this piece22 of legislation.23 The other issue that I want you24 to just, from an information standpoint25 39 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 for the Committee, talk about what we2 were talking about earlier relative to3 SREC rates, for example, in New Jersey as4 opposed to Pennsylvania and what that5 means to your ability or inability to6 finance projects.7
SREC stands12 for Solar Renewable Energy Credit. A13 brief explanation is, in the State of14 Pennsylvania in 2004, Governor Rendell15 signed into law the Alternative Energy16 Portfolio Standard, and what this says is17 that all utilities selling into the state18 have to have a certain percentage of19 their overall production come from solar.20 Right now that's a half a percent by21 2021. So between now and 2021, they have22 to get up to a half a percent, and it23 ramps up very slowly.24 In New Jersey, they have a very25 40 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 similar law, except it's two and a half2 percent, and because of that, because3 it's higher, their SRECs, their Renewable4 Energy Credits, are trading. Now, you5 trade SRECs in a marketplace, very6 similar to the stockmarket, and you can7 sell them. And so there's supply and8 demand issues. And in Pennsylvania,9 there's a lot of supply because, as10 Kristin said, the installers answered the11 bell. We installed the amount of solar12 electricity that the legislation called13 for. I hate to say it, but it was easy,14 because it's so low, it was an easy job15 to do. And now the SREC demand has gone16 way down, thus prices for SRECs have gone17 very low.18 In New Jersey, the opposite is19 true. There's still demand and the SREC20 prices are still very competitive,21 although there is market fluctuations22 going on. In all markets I would say23 that if we can see just a one point24 raise, something very simple, very minor,25 41 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 one point raise, from a half a percent to2 1.5 percent at a state level, it will be3 a huge jobs boon for the entire state and4 Philadelphia in particular.5
Now, I had6 met a number of -- well, a couple of7 folks who represent businesses who8 finance solar projects, and they9 explained to me this SREC problem. So I10 had made some inquiry to the Corbett11 Administration, and for one reason or12 another, philosophically they are natural13 gas and coal people, and they've made it14 very clear that that's where they think15 things should be.16 But what we did was, we hooked17 up the association of the folks who are18 financing these projects with the farm19 industry and the agriculture folks to get20 the representatives of the agriculture21 industry to approach the Corbett22 Administration for the potential point23 increase in the SREC rate to help24 agriculture. So if it's not an issue of25 42 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 southeastern urban solar arrays, perhaps2 the agriculture industry could convince3 the Corbett Administration -- and use4 your republican friends when you can use5 them -- to influence them to increase the6 rate, because it will benefit farmers of7 all kinds, both land farmers and dairy8 farmers and everyone else out there, and9 hopefully we can -- we've made that10 marriage. Hopefully that marriage will11 produce a one point SREC child.12
And that's13 very important. It's a very small14 change, and also this is a role that15 Bertha is very familiar with. When I go16 for financing for my projects, I have to17 forecast what we'll get for SRECs, and,18 you know, I come to -- I came to Bertha19 six months ago and we got a project20 financed and the SREC market was healthy21 at that point in time because it hadn't22 been built out as we were discussing, and23 now when I come to Bertha and I show her24 the projects that I want to do and she25 43 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 sees the way that the SREC market is2 going, it's very difficult, it's very3 difficult. As I explained, it's a4 low-margin business right now, and thus5 any savings that we can see on the City6 level really helps.7
Right, because8 the revenue for the company like Solar9 States, it's so much more limited when10 the market is so low; therefore, their11 ability to pay back any financing gets12 reduced. So the lender is more reluctant13 to lend, et cetera.14 So any cost that we can bring15 down and any revenue that we can bring up16 is much more attractive to the lender,17 obviously.18
You21 mentioned about other states. I was22 driving through New Jersey, I think it23 was, and the amount of solar that the24 public sector uses there, I was going25 44 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 through one community where every street2 light was powered by a solar panel.3 Nothing here.4
It's5 staggering, Councilman. It's staggering.6 And it's staggering for a number of7 reasons, because of the economic impact8 that it's had on New Jersey, it's huge.9 The amount of jobs that are created, it's10 something you can't outsource, frankly.11 I cannot outsource the installation of12 solar panels.13 And then, secondly, the impact14 on the environment. You know, these are15 all zero carbon energy sources, zero CO2.16 So it makes our health, our air better.17 I mean, I tend to think it's a18 no-brainer, but --19
I heard a20 story where PennDOT had a sign that they21 wanted to illuminate and they had to22 spend 20-some thousand dollars to get23 PP&L to run a wire to this sign and then24 it had to go underground, and somebody25 45 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 made kind of what Councilman Kenney just2 said, somebody said, Well, why don't we3 just put a solar panel up -- "but we4 don't do that" -- to light the sign.5 So it's -- I just can't figure6 why it's taking so long to get with it.7
I don't8 either. I always end anything I say9 with, the sun is the source of all energy10 on earth, period.11
It's14 dependable. People are not aware it even15 works when it's a cloudy day, you know.16
You don't19 really need the sun to charge these20 panels at least to, you know, some21 capacity; am I correct?22
That's23 correct. I mean, they operate in low24 sunlight. You can store the electricity25 46 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 in batteries and in other ways. So it2 is -- you can feed back into the grid.3
In all4 fairness, though, a lot of these trailers5 with the signs, like "slow" and various6 messages, they're starting to get with it7 slowly where they realize that's the way8 to go.9
Absolutely.10 You see more and more solar panels along11 the Turnpike and various roads in12 America.13
I was16 telling Micah earlier that my dream solar17 project is to get the DRPA to solar array18 the Ben Franklin Bridge on the south side19 and PATCO with a direct current using the20 New Jersey SREC rate.21
Thank you.24 Bryan Collins.25 47 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 (Witness approached witness2 table.)3
Sure. Bryan6 Collins. I'm the Philadelphia Outreach7 Coordinator for Citizens for8 PennFuture -- excuse me; Citizens for9 Pennsylvania's Future, commonly known as10 PennFuture. I rarely say Citizens for11 Pennsylvania's Future myself.12 I'll keep it brief, because13 really a lot of what I was going to say14 has already been covered.15 You know, basically to give you16 a quick background, the real fast blurb17 on who we are. We're a statewide public18 interest membership organization. We19 work to enhance Pennsylvania's20 environment and economy, and we take that21 very seriously, the connection between22 the two. We have offices here,23 Harrisburg, Pittsburgh, Wilkes-Barre, and24 we've been working to promote solar25 48 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 energy development around the state since2 2004, and we were part of the Alternative3 Energy Portfolio Standard process and4 supporting that bill, the AEPS, which5 created these RECs that we've been6 talking about. So we've been at this7 quite a while, and we definitely want to8 express our support for this bill.9 This is a small step, but it's10 an important step. It sends a signal to11 people around the City that even with12 variations that are beyond our control13 that are more at the state and the14 federal level, the City of Philadelphia15 is still willing to get behind these16 projects and do what it can to make them17 more appealing and just to get people18 over that hump, because we're really at19 that point where there's a lot of people20 who are interested in using solar power21 and installing it in their businesses,22 but then they have that spreadsheet23 moment where just how much are they going24 to lay out and how long is the payback25 49 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 going to be. And knocking a few thousand2 dollars off that because the City is3 going to reduce the installation fees4 will help and it will make a difference,5 and it very well could be that little6 deciding bump that puts things in place.7 And also I think, again, it's just such a8 positive signal that we're going to9 continue to adapt as a city to see these10 installations going up and make more11 things happen.12 Beyond that, I'll just throw13 some numbers behind what we've been14 talking about. In terms of job creation,15 we have three full-time staffers who look16 solely at renewable energy here in17 Pennsylvania, and they gave me a couple18 really nice numbers. Not a lot. Don't19 worry. Nothing boring.20 But solar creates more jobs per21 megawatt than any type of electricity.22 The estimates are roughly 2023 manufacturing jobs and 13 installation24 and maintenance jobs per megawatt. That25 50 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 is considerably higher than any of the2 alternatives or conventional energies3 that we're looking at.4
And do you5 have, just if you know, what the average6 salary is with the jobs?7
I don't know the8 average. I do, however, know that a9 report came out recently showing that10 they were significantly higher than11 similar manufacturing sectors, and I12 could send your office --13
And these18 jobs are also very entry-level friendly,19 I would say.20
Absolutely, yeah.21 I mean, there's plenty of low-skill22 opportunities with these kind of jobs,23 and the training opportunities can go24 from someone who is very low skill in the25 51 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 grand schemes of things to getting them2 up to speed to be able to do these3 installations, to be able to maintain4 them. It's a job creator for sure and5 definitely the kind of jobs we need here6 in Philly.7 And just to give you a sense of8 why this is important, this SREC market,9 when they're saying that there's an10 oversupply and the prices went down, just11 to give you a sense of it, the prices12 went from roughly 300 per SREC credit to13 20. So that hurts. That doesn't help.14 And hopefully it will get back, because15 PennFuture as a group with many, many16 others is currently working to raise this17 demand for the SRECs and get that market18 back up.19 But just to let you know that20 it is a difficult financial time for the21 solar industry. They're not down for the22 count, by any means. We are going to23 have more solar installs around the City24 and there is a very clear path that this25 52 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 is going nationwide. It's just this is a2 rough patch here in PA. So if you guys3 can put that signal out there that you're4 willing to support this, it would be a5 really great move.6 Thank you very much.7
Thank you8 for your testimony.9 Is there anyone else to testify10 on this bill or any other bill?11
Not a16 question. Did I hear you say that this17 is the direction that the nation is18 headed?19
And might21 you cite or identify a city that may be a22 little bit ahead of us?23
Yeah. It's the24 ones that you stereotypically think of,25 53 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 like San Francisco and Austin actually2 has some pretty good --3
Yeah. And, you6 know, it's been a while since I looked at7 sort of like where we're at, but to give8 you the good news, Philadelphia is9 already on the map, and we're usually in10 the top ten and in some cases the top11 five of some of these "who is the12 greenest city" kind of lists, you know.13 They come from all kinds of sources, so14 you never know what numbers they're15 looking at.16
But we're on the18 list. And, you know, that's what we19 really focus on with the Next Great City20 campaign, and that's what I spend a lot21 of my day doing, is trying to get Philly22 higher on that list, higher on that map23 of who are the really green cities that24 are making progress.25 54 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 So, yeah, our competition is2 the cities that you think of --3
-- that are5 leaders in a lot of these areas. But6 we're not that far behind.7
Well, the8 work of the Next Great City is extremely9 relevant, very progressive and forward10 thinking, and we need that to continue to11 be a real -- it is a guidepost, a12 guidepost for where our city needs to13 continue to grow.14 Thank you for that important15 work.16
There were19 two great quotes today. One was the sun20 is the ultimate source of origin of all21 energy, which is so profound in its22 simplicity. And then the other great23 quote was yours, a spreadsheet moment.24 Is that original? Because --25 55 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331
But the8 reason why it's important is that that9 moment is in a point where people decide10 whether to do or not do a project, and11 that is profound. So thank you very much12 for your testimony.13
Thank you15 very much.16 Anyone else to testify on any17 of these bills?18 (No response.)19
Seeing20 none, that will conclude our public21 hearing.22 We will now convene a public23 meeting, and the Chair recognizes24 Councilmember Reynolds Brown for a motion25 56 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 to approve Bill No. 110442.2 COUNCILWOMAN BROWN:3 Mr. Chairman, I move that Bill No. 1104424 be reported out of Committee with a5 favorable recommendation and further move6 that the rules of Council be suspended.7 (Duly seconded.)8
There are13 none opposed. Bill No. 110442 will14 report out of this Committee favorably15 and a request made for a rules suspension16 to allow first reading at our next17 Council session.18 The Chair recognizes19 Councilmember Jones to make a motion to20 approve the amendment to Bill No. 110533.21
I make a motion22 that the amendment be approved of Bill23 No. 110533.24
Can I have25 57 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 a second.2 (Duly seconded.)3
There are11 none opposed. The bill will be amended12 accordingly.13 The Chair now recognizes14 Councilmember Reynolds Brown for a motion15 on amended Bill 110533.16 COUNCILWOMAN BROWN:17 Mr. Chairman, I move that Bill No.18 110533, as amended, be reported out of19 the Committee with a favorable20 recommendation and further move that the21 rules of Council be suspended.22 (Duly seconded.)23
Moved and24 seconded.25 58 10/26/11 - ENVIRONMENT - BILLS 110442 & 1105331 All in favor?2 (Aye.)3
There are7 none opposed. Bill No. 110533, as8 amended, will report out of this9 Committee favorably and a request will be10 made for rules suspension to allow first11 reading at our next Council session.12 That concludes the business of13 the Committee on the Environment. We14 thank you for your attendance.15 (Committee on the Environment16 concluded at 3:05 p.m.)17 - - -18 59 CERTIFICATE2 I HEREBY CERTIFY that the3 proceedings, evidence and objections are4 contained fully and accurately in the5 stenographic notes taken by me upon the6 foregoing matter on October 26, 2011, and that7 this is a true and correct transcript of same.8 --------------------13 MICHELE L. MURPHY14 RPR-Notary Public15 (The foregoing certification of this19 transcript does not apply to any reproduction20 of the same by any means, unless under the21 direct control and/or supervision of the22 certifying reporter.)23