City Paper is not for tourists
Government oversight is a thankless job. One D.C. official who doesn’t phone it in is Ward 3 Councilmember Mary Cheh. But even Cheh had her resolve tested earlier this year after City Paper exposed inappropriate spending and fuzzy performance benchmarks orchestrated by the city’s renewable energy contractor.
Since 2011, the District has paid D.C. Sustainable Energy Utility $100 million (via Vermont Energy Investment Corp., a nonprofit firm that has held DCSEU’s sole contract for the period in question) to forge a path to a 50 percent renewable energy target by 2032. At its current rate, the city will not reach that goal.
Despite red flags and underperformance, D.C.’s Department of Energy and the Environment awarded DCSEU a new five-year, $100 million contract, which the D.C. Council approved on April 13 without batting an eye.
A couple weeks later, at an April 28 hearing, managing director of DCSEU Ted Trabue testified before Cheh’s Committee on Transportation and the Environment that his firm has reduced non-renewable energy use by 1 percent per year in recent years. Yet data from the U.S. Department of Energy shows that annual sales of electricity in the District have increased since 2013.
That was not the only misrepresentation. Under Cheh’s questioning, Trabue served up a number of misleading statements, obfuscations, and bland excuses. Under his leadership, DCSEU’s solar program has failed to deliver promised cost savings to low-income residents and small businesses. Director of DOEE Tommy Wells has not been an aggressive regulator.
Oversight hearings can go on for hours. The devil is in the details. At 3 hours and 55 minutes, during the April 28 hearing, Trabue told Cheh, “Last year our work helped to reduce electric use here in D.C. by 266,000 MWh.” (One megawatt hour [MWh] is equal to 1,000 kilowatt hours [KWh], which is the number of kilowatts of electricity used continuously for one hour.)
But a June 12 presentation of fiscal year 2016 performance results to the DCSEU Advisory Board by Tetra Tech, the city’s third-party evaluator, shows a reduction of electric use of 74,983 MWh for 2016—about 30 percent of the reduction amout Trabue claimed. (The figures he offered on natural gas reduction in his testimony included a similar disparity.) A DCSEU spokesperson says Trabue mistakenly referred to cumulative savings from fiscal years 2012 through 2016.
Two minutes later, at 3 hours and 57 minutes, Trabue boasted that DCSEU ranked No. 3 in energy efficiency among cities in a study by the American Council for an Energy-Efficient Economy. That was for 2015 though. Two weeks after the hearing, newly released 2017 rankings showed DCSEU dropping to No. 8. Trabue’s spokesperson acknowledges the drop, and offers: “In the past, ACEEE has identified the DCSEU as a ‘best practice’ and lauded the DCSEU for its efforts in energy-efficiency and sustainability.”
Adds Trabue, in a statement: “The DCSEU is incredibly proud of the work it has done over the past six years to save District residents and businesses money on their energy bills, create green jobs for District residents, and reduce the burden of energy costs on low-income communities. Our results are verified and audited every year and we are proud of our performance.”
At 4 hours and 24 minutes, Cheh referred to expense reports that claim $300,000 on travel and $200,000 on conferences from FY14 to FY16 as “excessive.” Trabue, in an effort to mitigate those figures, pointed out that DCSEU has 50 employees. However, at DCSEU’s June 12 advisory board meeting, while addressing administrative costs, Trabue said his office had 38 employees, according to attendees. His spokesperson, in an email to City Paper, puts the number at 43.
Such discrepancies might seem commonplace, but Loose Lips is always on the lookout for officials and private contractors who offer different figures for different occasions. Cheh, in a written statement, seems perturbed: “When I put people under oath, I expect them to be true to that oath. Anyone can make a mistake or misspeak, and I expect—and I will make that explicit going forward—that witnesses will supplement or correct any material mistakes that they make while under oath.”
At 4 hours and 31 minutes, Cheh asked Trabue about DCSEU’s $25,000 per month consulting contract with George Nichols & Associates, which operates out of a rowhouse near Union Station. (Nichols himself bills at more than $140 per hour.) Trabue responded that the Nichols’ firm includes “about three persons, sometimes four,” and that it provides program design, regulatory compliance, public affairs, and community relations services.
That might be a generous estimate of the firm’s operation. Observers say Nichols frequently sits for hours on end in meetings and hearings, saying and doing nothing. Invoices, obtained by LL through a Freedom of Information Act request, consist of single line entries for Nichols and his wife, Deborah Nichols, the former D.C. Auditor, that offer no specifics regarding their services. Wells, director of the DOEE, says he does not recall ever meeting the purported additional employees.
A cornerstone of D.C.’s clean energy initiative is its solar program. But DCSEU has fallen down on that job too. A review of a $2.4 million investment in solar systems in FY2015 shows that DCSEU oversaw solar contractors who installed 158 solar systems for low-income households and 13 systems on small businesses. Together these systems generated 552,000 watts of electricity for that period—a cost of $4.35 per watt for installation. According to a 2016 report by the U.S. Department of Energy’s National Renewable Energy Laboratory, however, the average cost for a single family residential installation is $2.93 per watt. (Commercial installation costs even less, the report states.)
Sam Brooks, a former director of the energy division at D.C.’s Department of General Services, says solar installers also received a subsidy in the form of energy credits that they later can sell for between $1.60 and $3.00 per watt to electricity suppliers who are required to meet what is known as a Renewable Portfolio Standard. “This is the whole ballgame,” says Brooks, who is currently a renewable energy contractor (and submitted a bid on the most recent five-year contract). “While the rest of the country is doing everything they can to create efficient solar programs that keep costs down, it looks like we are spending twice as much on solar as anyone else.”
In addition to allowing solar installers to hoard energy credits, DCSEU allowed them to claim tax credits on the installed solar systems, and later require residents to purchase the systems at fair market value after depreciation. An August 17, 2016, email to Trabue from Taresa Lawrence, deputy director for energy administration at DOEE, expressed “grave concerns” and requested that Trabue submit the contracts for review. Despite warnings from DOEE that delays were “unacceptable,” Trabue stalled until Lawrence threatened to halt payments to DCSEU.
Then, in an August 22, 2016, letter to Trabue’s principals at Vermont Energy Investment Corp., Wells took DCSEU to task for allowing practices that “do not adequately protect the interests” of solar customers. Wells also admonished DCSEU for functioning as a pass-through, and for relying on the government to conduct due diligence.
Wells concedes that DCSEU’s solar contractors may have taken advantage of low-income residents and blames it on contract terms that do not reflect DOEE guidelines. He says new contracts allow DOEE to scrutinize costs and ensure the public receives maximum benefit. “There’s a bunch of people in the private sector who think they know how to spend millions of dollars, and it’s up to us to hold them accountable,” he says. “Because this is so new, it’s like the Wild West.”
DCSEU did such a poor job executing the solar program that the city has allocated its resources to an alternate initiative. In July, Mayor Muriel Bowser announced $13 million in new “Solar for All” innovation grants to 10 for-profit and nonprofit energy contractors with the goal of “expanding solar energy in the District; providing the benefits of solar power to low-income District residents; and identifying innovative solutions to overcome core barriers to installing more solar energy systems in the District.” Funding for the Solar for All grants is authorized by legislation introduced by Cheh in 2016. The new initiative aims to train District residents to install solar systems and allow hundreds of low-income residents to save up to $600 per year on their electricity bills over the next several years.
Even recipients of that grant money are unimpressed. “D.C. doesn’t have a long-term, consistent plan, and it has no reliable reporting program,” says Anya Schoolman of D.C. Solar United Neighborhoods, a nonprofit. “There are these bursts of money that everyone runs toward, then it goes away. We need meaningful targets and goals, like other states do, so we can grow and invest. It’s one of those things we can do that creates real jobs and real relief to ratepayers.”
Realizing such gains will require D.C. to be honest. That’s where oversight of DOEE, by Cheh and the D.C. Council, which holds the purse strings, comes in.
“DCSEU could do better, but it’s up to Tommy,” Schoolman says. “The buck stops at DOEE.”
This story has been updated to clarify the genesis and purpose of D.C.’s “Solar for All” initiative.