Village Council— Energy credit sale considered
- Published: February 6, 2020
For every one-megawatt hour of green energy the Village of Yellow Springs purchases, it receives one Renewable Energy Certificate, or REC.
And with a portfolio that is 83% renewables, on the open market, the Village’s RECs could yield about $100,000 per year.
Village policy has been to retain its RECs. At its Jan. 21 meeting, however, Council looked at the possibility of selling them.
Council President Brian Housh said he asked Village staff to present data on the issue in order to look at “revenue-generating opportunities for the Village.”
“For several years we’ve had a policy that we hold on to our [RECs],” Housh explained.
“There are lots of municipalities and organizations that sell their renewable energy credits to companies who are polluters, to be frank,” he added.
Since the Village pivoted to renewable energy sources starting in 2010, it has been accumulating RECs, commony referred to as renewable energy credits.
But since they expire after five years, and lose some value in the market each year, the Village’s current inventory of RECs are now worth about $362,154, according to figures presented by Village Manager Josué Salmerón.
“These numbers would become much more tangible when we engage a broker,” Salmerón said.
Most of the Village RECs, 55,465, are from its three hydropower plants, with another 4,894 RECs from a landfill gas operation in Brown County, Salmerón reported. Currently, the market value of these RECs averages $6 per credit, he added.
The market for RECs is created by state compliance laws, such as renewable energy portfolio standards, which mandate that utilities produce a certain amount of renewable energy annually.
Instead of investing in their own green projects, however, the companies can instead purchase RECs from other projects, Salmerón said.
Council Member Kevin Stokes also explained the reason for the transactions.
“A company who does pollute might be in a position where they have to pay some fees and those fees can be reduced if they buy some credits,” he said.
A smaller number of RECs, about one-quarter of the market, are purchased voluntarily by companies, households or governments, according to a chart presented by Salmerón.
Concluding his presentation, Salmerón said the sale of RECs evokes the philosophical question, “Can you sell your RECs and still be green?”
Council members shared their immediate responses to the conundrum.
“If you generate them, you’re green,” Stokes said. “I don’t know if you become un-green by selling them.”
“But are you enabling a polluter to continue to pollute?” commented Council Vice President Marianne MacQueen in response. “That’s more important to me than whether we’re [green.]”
One community, Salmerón said, sells its RECs in a high-priced market and purchases new ones in a cheaper market “and they still claim they’re green.”
Housh said he welcomes a “robust discussion on the topic” and looks forward to hearing from villagers.
From the floor, Anthony Wolking asked where the revenue from a sale of RECs might go.
“Does it go back to the community to where it supports more solar that frees us from potentially having to sell RECs in the future?” he asked.
Salmerón said, tentatively, the money could be invested back in the electric system, including possibly adding storage batteries or more solar to improve the local infrastructure for renewable energy.
Also from the floor, this reporter suggested that another possible use of the revenue would be for utility bill relief for ratepayers who have borne the costs of higher electricity rates for renewables.
The matter was discussion only and no decisions were made. The issue will be revisited at Council’s Feb. 16 meeting.
Council members agreed, however, that the proceedings of any sale would not be spent in another municipal fund.
In other Council business at its Jan. 21 regular meeting —
Home, Inc. request questioned
During the citizens concerns portion of the Jan. 21 meeting, Dino Pallotta spoke about a Home, Inc. request for a tap-in fee waiver for its 54-unit senior apartment building. A letter and incentive application from the group was included in the Council packet, but was not on the agenda.
Pallotta said he was concerned that taxpayers were continuing to subsidize the affordable housing nonprofit, noting that Council already committed $60,000 to the group over the last two years.
“While it may make them affordable, it’s not making us affordable as a taxpayer,” Pallotta said. “Where is there a line that is gonna finally be drawn where you can go to the well so much?”
In a letter dated Jan. 15, Home, Inc. requested that tap-in fees be waived for the project. Home, Inc. requested that Council grant the fee waiver at its Feb. 3 meeting, ahead of a Feb. 15 application for tax credit financing for the project. Home, Inc. had applied for the financing last year, but was unsuccessful and is reapplying this year.
No estimated cost for the fee waiver was given at Council. Reached for additional information this week, Village Manager Salmerón said the tap-in fees for electric, water and sewer connections for the project are estimated at $40,500.
Home, Inc. wrote in its letter that the incentive would reduce the project’s per-unit cost and improve its scoring in two areas of the financing application. The nonprofit also estimated that the property would yield $50,000 in total annual property tax revenue, some of which would go to the Village, among other arguments for the incentive.
Council members share goals
Council members each spoke briefly about their goals for 2020.
Council Member Laura Curliss said she is excited about the new local community development corporation, and highlighted the need to make infrastructure improvements, especially in the sanitary waste and stormwater systems.
“You’re correcting problems from the past,” she said of the infrastructure issues.
Council Member Lisa Kreeger said she wanted to stay involved on the Village manager’s financial advisory board, and to help set up a citizen review board for police matters.
“I remain committed to a platform for community members to talk about their experiences with the police,” she said.
Stokes discussed the importance of keeping transient guest lodging “moderated.” He said he’s gaining sensitivity to affordability issues, and would like to see municipal broadband move forward.
“Ultimately fiber to home is what I’d like to see us end up with,” he said.
Stokes said that while much attention gets paid to the Glass Farm, “let’s make sure we are also doing things to make infill a reality.”
MacQueen said infrastructure was at the top of her list, specifically the stormwater management system.
“We should at least be talking about creating a line item in the budget for stormwater management,” she said.
MacQueen also said she wants the Village to stay involved on the Vernay remediation, to commission a new sourcewater protection plan and to continue to make progress on creating housing options for low- and moderate-income people in the village.
Finally, Housh said he wants to focus in three areas, infrastructure improvements, the Village property tax levy renewal and implementing the Comprehensive Land Use Plan now under development.
“We are committed to implementing those recommendations,” he said of the plan.
To burn or not to burn?
The fate of the village’s Christmas trees was addressed in two letters sent to Council and included in the Jan. 21 packet.
The Village annually picks up trees curbside a few weeks after Christmas.
Macy Reynolds of the Yellow Springs Tree Committee, wrote that the group prefers the trees be burned this year, as they were mixed with other trees and plant debris and may contain invasive species. She added that in the future the Village should keep the trees separate from other plants, and mulch them.
In his letter, Eric Oberg wrote that his research led him to the conclusion that live trees are more environmentally friendly than their plastic counterparts, provided they are mulched for further re-use.
Salmerón said during the Council retreat that the Village is still contemplating the best path forward.
“I put the bonfire on hold,” he said.
Executive session on real estate
Council met prior to the Jan. 21 meeting in a 30-minute executive session “for the purpose of the discussion of the potential sale of real estate.”
No legislation was passed at Council’s Jan. 21 meeting.
In other Council discussions, from its Jan. 15 retreat —
Paid parking debated
During Council’s retreat, the issue of paid parking in the downtown area elicited differing views among Council members and Village staff.
In his presentation, Salmerón said paid parking is the “general direction municipalities are going,” and might be a good fit for the Village, and he suggested the use of an app-based parking system.
“Yellow Springs has unique challenges around parking solutions,” Salmerón said. “Residents say, ‘We have limited parking but we don’t want more parking.’”
Paid parking encourages a “rotation among businesses,” which is good for the local economy, Salmerón said.
“What we’re looking at is minimizing the impact on our residents and still maintaining, or encouraging, economic activity in the village,” Salmerón said.
But some Council members questioned the move toward paid parking.
Curliss, for one, said she would vote against a proposal for paid parking.
“I think one of the great things about Yellow Springs is it has a nice, welcome feeling of freedom,” she said.
Additionally, Curliss said the Village should take down the “two-hour only” parking signs in the downtown area, since they are not enforced and clutter the area.
MacQueen raised concerns specifically about the community’s acceptance of the idea.
“If there’s going to be a lot of time spent on how we would do paid parking, I’d also like to see equal — or maybe more — time spent on how are we going to get residents to accept it,” MacQueen said.
Kreeger said she has more questions than answers about paid parking, such as the potential profit and the impact on residents and businesses.
“I’m not saying at this point whether I’m for or against it,” she said. “I still haven’t seen the business case.”
Stokes asked whether residents might have special parking privileges under a paid parking scenario. Salmerón responded that there may be zones exempted from paid parking, and that the initial locations for paid parking will most likely be municipal lots.
Housh urged Council members to hold their opinions on the matter until after the proposal is explored in more detail.
Commissions, committees discussed
Council will explore an alternative to the commission structure, members decided at its regular meeting after a longer discussion at the retreat.
Currently there are 14 official local commissions and Village manager advisory boards, including several on hiatus.
Curliss had proposed a new committee structure for Council, which would align public committees with municipal departments and not require so many commissions. Committee meetings would be open to the public and include some citizens, Curliss added.
“The committees would mirror the departments of the Village,” Curliss said. “I think it’s a much more effective way.”
Housh briefly explained his view on the difference between committees and commissions.
“A committee structure is a Council-led structure and commissions are more citizen-led,” he said.
In response to Curliss’ proposal, Council will pilot a committee to see how it works.
In other commission changes, the Economic Sustainability Commission will be put on hiatus in 2020 with the start of the YS Development Corporation. And a new Active Transportation Committee will operate under the umbrella of Planning Commission.
Transient guest lodging slows
Village Planning and Zoning Administrator Denise Swinger told Council at its retreat that applications to create transient guest lodging at local residences slowed at the end of 2019.
The shift came after Council changed the use from a permitted to a conditional one that requires a Planning Commission hearing, Swinger explained.
“It has slowed down,” Swinger said.
From Jan. 1–Aug. 14, a total of 18 permits for guest lodging were issued by her department, Swinger said. From Aug. 14 — soon after Council changed the ordinance — until the end of the year, only one permit was granted.
“There was a flood right before it went to a conditional use,” Swinger said.
Currently there are 49 active permits for transient guest lodging in the village, although not all are available through the popular rental site, AirBnB, Swinger said.
In response to a question from MacQueen, Swinger said that the majority of local guest lodging are in apartments or accessory dwellings, not entire homes.
In comparison, in 2019, most permits were granted for accessory structures (58), with many of those solar installations, followed by fences (20), additions (nine) and single-family dwellings (nine).
In other Planning and Zoning news, Swinger reported that 2019 saw 75 violations under the zoning code, most for weeds and tall grass, a 34% increase over the prior year.
Village employee profile
Salmerón’s presentation at Council’s retreat included a demographic breakdown of the Village’s 49 current employees:
• 38.8% live in Yellow Springs, 76.5% live in Greene County
• 61.2% are male, 36.7% female and 2% are no specific gender
• 75.5% are white and 24.5% are non-white (8.2% black, 4.1% Hispanic, 12.24% multi-racial or other)
Council’s next regular meeting is Monday, Feb. 3, at 7 p.m., in Council chambers.