San Jose energy company wants to bend the rules—again

Milpitas might become the next Silicon Valley city to ban natural gas in new buildings, but advocates worry city officials will undermine the policy by exempting one local energy company.

The Milpitas City Council will consider approving two policies tonight to combat climate change and reduce greenhouse gas emissions. One would require more electric vehicle charging stations around the city, and the other would impose an all-electric mandate on new construction for both homes and commercial spaces. It would also require future renovations of existing buildings to retrofit from natural gas to electric to comply with the citywide mandate.

That doesn’t sit well with San Jose-based Bloom Energy, which is directly in the potential mandate’s bull’s-eye. The public company is angling for an exemption, and it wouldn’t be the first time.

Bloom Energy launched a similar campaign to protect the use of its technology in 2020 when San Jose was considering a similar policy. Under the leadership of its previous vice president, Carl Guardino, an ally to former San Jose Mayor Sam Liccardo, the company successfully wrote an exemption benefitting its technology.

According to a letter sent to Milpitas last December, company representatives asked the city to continue allowing gas pipelines around new buildings—effectively enabling the use of the company’s fuel cell microgrids.

“If the city pursues (this policy), fuel cell microgrids would no longer be an option to support reliable and clean power, creating a de-facto monopoly for backup diesel generators,” said James Apffel, government and community relations coordinator of Bloom Energy. “Diesel generators release harmful air pollutants and greenhouse gas emissions, and they become the only long-term energy reliability option in the context of a full moratorium on natural gas infrastructure, including uses outside of the building.”

In a response to Bloom Energy, Milpitas Building Official Bill Tott said the company’s proposal runs counter to the state’s direction to reduce gas infrastructure usage. Tott also said Bloom Energy’s fuel cells are impractical and expensive, and the city could use solar energy-supplied batteries as an alternative to diesel generators.

Environmental groups are urging elected officials to approve the proposed policies, saying they are crucial to help the city achieve its climate change goal. But some are also alarmed with a push from Bloom Energy to create an exemption in the natural gas ban.

The company’s fuel cells, which require gas lines to operate, run nonstop. According to the Natural Resources Defense Council, they produce approximately quadruple the amount of greenhouse gas emissions as those produced by the renewable electricity from PG&E and the occasional use of a diesel backup generator during power outages.

Linda Hutchins-Knowles, a volunteer with Mothers Out Front Silicon Valley and a senior manager at Acterra, said Bloom Energy’s proposal is troubling. Mothers Out Front and Acterra, both environmental justice groups, oppose exempting the company from the proposed policies.

“Bloom Energy’s proposal allows what exactly the (policy) is trying to stop, which is allowing new fossil fuel pipelines to be built,” she told San José Spotlight. “We are disappointed, but not surprised. We hope the city of Milpitas and the leadership there will be wise enough to understand this issue.”

Councilmember Anthony Phan said he’s worried about potential impacts the natural gas ban would have on the regional power grid and cost of construction. He said banning natural gas could add to construction costs and deter developers from building more homes.

“One of the biggest hurdles in new housing construction is the costs,” Phan told San José Spotlight. “How can we incentivize people to build more if we are going to add on to cost (and) a new set of regulations that go beyond what is typically expected?”

He anticipates the council will be split on policy decisions, noting two out of five councilmembers just assumed office this year and haven’t participated in previous discussions that took place last October.

“Long-term electrification is what we want to aim for, but we want to make sure that we’re doing it the right way,” he said.

The Milpitas City Council meeting starts at 7 p.m. Click here to participate in the meeting.

This story will be updated.

---

The views expressed in content distributed by Newstex and its re-distributors (collectively, "Newstex Authoritative Content") are solely those of the respective author(s) and not necessarily the views of Newstex et al. It is provided as general information only on an "AS IS" basis, without warranties and conferring no rights, which should not be relied upon as professional advice. Newstex et al. make no claims, promises or guarantees regarding its accuracy or completeness, nor as to the quality of the opinions and commentary contained therein.