Valero opts for boiler project over condensate recovery
In continuation of action it began June 17, Benicia City Council on Tuesday approved by a 3-2 vote a slate of Community Sustainability Commission grants.
Using Valero-Good Neighbor Steering Committee Settlement Agreement funds that at one time were earmarked for the Valero Benicia Refinery Condensate Recovery Project II (CRPII), the Council agreed to grant Benicia Community Gardens $52,840 for its sustainable back yard project; the Benicia Resource Incentives Program (BRIP) that helps Benicia Industrial Park companies reduce water and power consumption and waste generation, $100,000; Benicia Public Works, $100,000 for water rebates; Benicia Parks and Community Services, $46,000 for drip irrigation and $153,000 for water irrigation systems; Benicia High School’s ECH2O Academy, $11,328; Benicia Unified School District, $60,970 for the CalSense Water Management System; Benicia Tree Foundation, $17,500 toward its goal of planting 1,000 trees; and Solano Resource Conservation District Suisun Marsh Watershed Education, $48,407.42.
WattzOn, the city’s contractor for residential water and power use assessments, would have its payment taken from the same fund source.
The Community Sustainability Commission also has authority to spend certain unallocated money from the settlement fund. From that source, it recommended and Council approved awarding another $52,840 to Benicia Gardens for its sustainable back yard program; a total of $400,000 to BRIP; $20,000 to the CSC’s Bicycle Benicia program; $17,500 to the Benicia Tree Foundation; and $40,000 to Benicia Makerspace, which plans to use the money to provide participants with a community workspace.
The Council concurred with its staff recommendation to defer granting the CSC any money for its own water and energy conservation rebate program to provide more efficient fixtures and appliances to low-income and older residents first, and to other residents as far as the money would go.
The commission originally had hoped to pose that project as a competitor for as much of the CRP II money as possible. It later reduced its request to $716,301.58.
Of those opposing the resolution, Vice Mayor Tom Campbell voted against his own motion to approve the resolution, expressing concerns that some of the recipients had administrative costs he found “uncomfortable.”
Mayor Elizabeth Patterson, who praised several of the projects, applicants and the commission’s work in analyzing the requests, also voted no, saying, “We are not a company town,” and added, “We need to respect the process.”
She was referring to the June 17 meeting, at which the Council approved, by the same 3-2 vote, providing $829,000 to Valero Benicia Refinery for an $852,000 boiler water conservation project if the refinery would withdraw its claim to $1.6 million in Valero-Good Neighbor funds for the CRPII.
The Valero-Good Neighbor Steering Committee Settlement Agreement account was established for Benicia and Benicia Unified School District use in 2008. Money in that account can only be used for specific projects or expenditures, based on the agreement’s provisions.
That year the refinery and the Good Neighbor Committee agreed that of the $14 million settlement account, $200,000 should be spent on air quality monitoring; $50,000 for hybrid cars; $700,000 for trees; $1 million each for a refinery buffer and watershed acquisition; $400,000 for reducing greenhouse gas emissions by Benicia Unified School District; $10 million for water conservation; and $600,000 for Climate Action Plan projects.
In 2010, the pact was modified to allow $2.85 million for the Community Center, $1 million for the BUSD and Liberty Campus Community Center and $1.4 million for the Valero Condensate Recovery Phase II project to save 23 million gallons of water a year.
In lieu of attorney fees, $150,000 also was earmarked for community gardens, a renewable energy manager, energy conservation, a school horticultural program and bicycle racks.
Valero, the committee and the city of Benicia agreed to the pact, but the city and committee disagreed with the refinery about whether Valero had met its obligations to have the CSC review the condensate recovery project.
After Tuesday’s Council meeting, the refinery’s public affairs manager, Sue Fisher Jones, said, “There seemed to be some confusion … as to why Valero would apply for a grant for water reduction.”
She said the 2010 amendment to the settlement agreement was designed to encourage applications for “verifiable water reduction” projects. “Valero had begun investments in the Condensate Recovery Project II (CRPII), having completed the design phase. The refinery was in the planning/scheduling phase.”
Refinery officials have said that a presentation about CRPII made by Chris Howe, director of health, safety, environment and government affairs, to the CSC on Sept. 19, 2011, was the requisite review before the panel.
Commissioners, Good Neighbor Steering Committee members and several members of city staff have said they believe otherwise, however, and the disagreement has been so strong that Councilmember Alan Schwartzman spoke with City Attorney Heather McLaughlin about the matter before the June 17 meeting.
“It was very clear to me that the 1.6 million CRPII dollars were in dispute,” Schwartzman said Tuesday, saying the refinery and the Good Neighbor Committee were equally adamant in their differing views about whether Valero had qualified for the money.
He said he worried that the dispute could go on for years and might end up in litigation, costing both time and money.
“That night, I thought I would take a chance,” he said of his proposal. “My hunch worked out. We have the money now.”
Schwartzman reminded the Council that one version of the settlement agreement placed an even greater emphasis on water conservation projects, and said the boiler project, like the CRP II project, emphasized saving water.
He suggested the swap at the June 17 meeting as a means of accomplishing two things — ending the dispute and freeing up more money for many of the grants recommended by the CSC.
At the same time, he suggested that $18,000 be approved for the city’s application and corresponding feasibility study to join Marin County’s community choice aggregation power supply organization.
John Hill, vice president and general manager of the Valero Benicia Refinery, affirmed at the June 17 meeting that if only one refinery project were to be funded with settlement money, he would prefer the boiler project, which was inspired by talks between the city and his company about ways Valero could help Benicia save water during the statewide drought.
Though it uses raw water rather than treated, the refinery consumes about half the water used in Benicia city limits, according to Public Works reports.
Hill followed up his promise two days later with a letter saying, “Valero agrees to withdraw the $1.6 million credit scheduled for 2014 for CRPII if the Benicia City Council awards an $829,000 grant toward Valero’s Boiler Water Conservation Project — a project that will save approximately 38 million gallons of water annually.”
That’s the equivalent of 116 acre-feet, Hill wrote.
“It is a tough decision for me to walk away from CRPII,” he wrote, “but knowing that the Boiler Water Conservation Project can gain water reductions sooner and double the annual water savings, I know this project will benefit our city of Benicia in this time of drought.”
Fisher Jones said Valero’s boiler water conservation project “should be completed within a few months. In addition to the water savings, she said, “It will also reduce greenhouse gas emissions by an estimated 3,796 metric tons per year.”
The Council vote Tuesday awarded the money tentatively earmarked for the condensate recovery project to applicants that already had received CSC recommendations for approval.
The commission did not endorse the Valero boiler project, but believed so strongly in the community choice aggregation application that it formulated and submitted that grant application itself.
Attorney Dana Dean, who as a member of the Good Neighbor Steering Committee helped to craft much of the settlement agreement, recommended some wording modification in the grant resolution, which the Council accepted.
Dean also said the $14 million made available in the fund was designed to benefit the community of Benicia.
She said she supported the commission’s original recommendations, saying most of those seeking grants were volunteers who had written applications on their own time with the hope they would be able to accomplish their projects.
“We ask you to fund these smaller projects,” she said. “There’s enough here to catch these orphans and let them grow.”
Thomas Petersen says
Good call city council. Cool heads do prevail.
DDL says
From the article: “Vice Mayor Tom Campbell voted against his own motion to approve the resolution, expressing concerns that some of the recipients had administrative costs he found “uncomfortable.”
That comment certainly warrants further discussion, elaboration from Mr. Campbell and potentially investigation by those tasked with watching how tax dollars or other funds for which elected officials are responsible.
It appears that $52,840 followed by “another $52,840” was awarded to “Benicia Community Gardens”, a noble cause, but over $100,000 will go a long ways in meeting their efforts.
Bob livesay says
Tom Campbells vote for sure expressed gs concern about administrative costs. If they had been broken down one by one vote he would have voted again both. He followed what he said. On the other hand the mayor is the one that did not follow her hand. She voted no becvause of the BRIP grant pure anti business. She would have votde for the others with the exceptiion of BRIP grant if again they would have been as individual votes. Both voted the way they thought. The mayor as anti big business the Vice Mayor as a financial responsibility. It turn out about 80% ok. I do except the 3/2 vote as a good move.
Bob livesay says
Vice Mayor Campbells vote was brilliant. Notice who he brought into the no vote issue. Yes the mayor just expressed her anti big business. Which leads me to think Valero Crude by Rail issue. She just gave away her vote if it is called for. Brilliant move. You know we are not a company town. Does that tell you something. about where the Mayor stands. Yes