Santa Clara, California, is effectively banning fuel cells to protect its municipal utility from competition, according to a suit filed by Bloom Energy, a fuel cell company.
“The city has refused to process the pending applications by deeming them incomplete and demanding that Bloom instead pursue discretionary use permits as required for ‘power plants,’ ” Bloom said in a suit filed June 29 in Santa Clara County Superior Court.
Last year, in response to an earlier Bloom suit, a judge at the court said the city violated state law when it passed a resolution banning nonrenewable fuels for distributed generation, including fuel cells.
Bloom has five fuel cell installations in Santa Clara totaling 14.9 MW that were approved by the city via building permits, according to the suit. The city didn’t require use permits or an environmental review.
Two years ago, Bloom filed applications to install 13 MW of additional fuel cell capacity for technology companies Intel and Equinix. Two of Intel’s existing fuel cell installations are part of microgrids, according to Bloom.
City says fuel cells are ‘power plants’
After the court ruling, the city reinterpreted its zoning code by deeming fuel cells to be power plants, according to Bloom. In addition, the city decided the fuel cells would have to go through a state environmental review process. The city asked Bloom to pay $121,230 for the environmental review.
Bloom said its fuel cells are “accessory uses” installed to provide on-site power. They are about the same size and shape as other accessory uses such as heating, ventilation and air conditioning units, according to the company.
Unlike a power plant, the fuel cells are safe, quiet and have such low emissions they can be set up feet from occupied areas, Bloom said.
“The city is, in effect, banning Bloom Energy servers from operating in the city through an unsupported and illegal reinterpretation of its own zoning code,” Bloom said. “By preventing and delaying the construction of new fuel cell projects, the city is illegally forcing businesses to use [Silicon Valley Power] to further its own economic interests.”
Bloom’s lawsuit cites emails between employees of Silicon Valley Power, the city’s utility, that discuss how fuel cells were reducing the utility’s sales and the need to limit fuel cells in the city.
Silicon Valley Power has a peak demand of about 590 MW and sales to industrial customers make up about 90% of all its sales, according to the utility.
Bloom has deployed fuel cells worldwide totaling more than 500 MW, according to the San Jose, California-based company. Bloom contends its fuel cells produce less carbon emissions than the most efficient natural gas-fired turbines and almost no nitrogen oxide or sulfur dioxide emissions.
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