Solar industry, unions heading for clash on jobs

By Alexandra Berzon, David McGrath Schwartz

Saturday, Feb. 28, 2009 | 2 a.m.

The appointment on Rep. Dina Titus’ calendar last Saturday didn’t appear controversial at first glance.

She was to tour the new 10-megawatt Boulder City Sempra Generation plant — the largest solar power plant in North America to use widely praised thin-film technology. The project also produced the kind of environmentally friendly jobs that elected officials covet and tout.

Yet Titus soon realized that she was wading into a political firestorm.

In Carson City, Nevada legislators had blasted Sempra for its hiring practices, part of an intensifying debate here and nationwide over who is to benefit from growing state and federal renewable energy incentives aimed at saving not only the environment but also the economy.

Titus was a last minute no-show at Sempra.

Word of the tension between labor and the solar industry in the halls of the Legislature had reached Titus, her spokesman confirmed. Although legislators seemed to be spreading some false information to make their case, it wasn’t a good time for Titus to appear to choose sides, he said.

As Congress passed the $787-billion economic stimulus package to create an estimated 1.6 million jobs in environmentally friendly industries, some national labor and environmental groups have tried to broaden the definition of “green jobs.”

A recent report from a coalition of labor unions and the Sierra Club stated that green jobs have been discussed largely in terms of the numbers to be employed. “The question of whether these new jobs will offer wages, benefits, and working conditions needed to sustain families and communities has received much less attention,” the groups stated.

The authors recommend state and federal renewable energy legislation include labor requirements.

Solar executives say the trouble with that approach is such laws could slow the growth of environmentally beneficial projects.

“You have projects that are moving forward and developing energy sources that are renewable and nonpolluting and that should be sufficient,” said Steve Chadima, a senior vice president at Suntech Energy Solutions and chairman of Solar Alliance, a trade association.

Solar companies provide many high-paying jobs, including union jobs, without legislation mandating it, he said. His company hired union electricians to install solar panels at the Venetian.

The tension between labor and solar could soon come to a head in the Legislature.

Two years ago labor provisions failed in the state Senate, which Republicans controlled at the time. With Democrats controlling the state’s upper house, labor is newly emboldened by its role in Democrats’ November victories.

“There seems to be a potential collision coming,” said Sen. Randolph Townsend, R-Reno, who has worked on renewable energy issues in Nevada for decades.

Part of the unease between organized labor and power companies involves what labor unions say was an early slight, and what many in the industry now acknowledge was a misstep.

In operation since June 2007, the

64-megawatt Nevada Solar One plant built by Spain-based Acciona was the first solar thermal plant built in 17 years and the largest of its kind in the world. The $260 million construction project hired labor from outside Nevada and in many cases outside the United States.

That became a rallying point for the state AFL-CIO, which had promoted legislation in 2001 that provided $15 million in state incentives for the plant. The union had imagined the incentives would be used to train and hire Nevadans for the high-paying specialized electrical work of hooking up photovoltaic solar panels to homes and businesses.

“We wanted to create something of value where you would build an industry and promote the whole idea of photovoltaics,” said Danny Thompson, executive secretary-treasurer of the state AFL-CIO. “What happened was that solar thermal plant used up the entire allocation in one fell swoop.”

When the plant scheduled its opening ceremony, unions sent letters to elected officials telling them not to attend.

Brought in eight months ago after much of the drama had occurred, Acciona Solar Chief Executive Dan Kabel says his predecessor believed the company had no choice.

“All the others (contractors) were too high, and the project wouldn’t have happened,” Kabel said. “It wasn’t Acciona’s intention, but the contractor brought in nonlocal people from Central America.”

The union protests prompted Acciona to send the Southern Nevada Building and Construction Trades Council a memorandum of understanding calling on unions to stop the attacks.

The unions say they didn’t sign on to the memorandum, which they maintain said Acciona would hire union labor in the future.

Kabel says the memorandum was vague, stating only that the company would negotiate with the union on future construction projects. But, he said, hiring all union labor for an upcoming expansion wasn’t economically feasible.

Instead he committed to build with a small percentage of union labor and 100 percent Nevada workers.

“We tried really hard to find a way to set a new path for a relationship with the building trades council,” Kabel said. “To do what they requested would have resulted in no project and no jobs.”

The battle has shifted to Carson City.

The 2001 law that allowed renewable energy projects to get sales and property tax rebates expires in June. Its renewal is likely to come up again this session and be the focus of the tension, observers say.

Solar developers and the Nevada Commission on Economic Development say the incentives are vital to keep Nevada competitive with surrounding states.

But labor unions, and some Assembly Democrats, say the tax incentives provided too little benefit to Nevadans.

Assemblywoman Debbie Smith, D-Sparks, has been a critic of some incentives. “If renewable companies want to get benefits, there has to be accountability, they have to hire Nevada people, and money has to be invested in Nevada,” she said.

Thompson said that while unions are not going to publicly push labor provisions in renewable energy bills, they hope to see health and wage requirements tied to tax incentives, along with a requirement that companies hire Nevada-based workers.

Solar companies say they will be forced to locate their projects elsewhere or not build at all if extra costs are heaped on a developing industry.

“If Nevada does something to produce a built-in higher price for large-scale solar, it will be disadvantaged with regards to other locations,” Kabel said. “We are developing in Texas, Arizona, New Mexico, Colorado and California, and we’re going to go where there’s the most certainty and the best climate.”

Thompson acknowledged that labor tried to go too far in the 2007 bill. He’s treading more carefully this time.

“Killing everybody isn’t what we want to do,” Thompson. “But at the end of the day if a project promises the moon and you end up with nothing, that’s a problem.”

An early skirmish came Feb. 19, during a hearing on tax abatements. Assemblywoman Marilyn Kirkpatrick, D-Las Vegas, testified that Sempra’s El Dorado Energy project in Clark County got a $1.8 million sales tax abatement while hiring only one Nevadan. All the other workers came from out of state, she said.

Company officials later said that unlike the initial Acciona project, 65 percent of the workers on the Sempra job came from Nevada.

But the damage was done. Industry officials were irate, seeing it as an unfair attack.

The back and forth prompted Titus to canceled her Sempra visit.

Sempra had provoked the ire of the International Brotherhood of Electrical Workers for hiring nonunion electricians, who the union insists were not properly certified to install photovoltaic panels. (Sempra spokesman Art Larson said he wasn’t aware of and couldn’t respond to those accusations).

Building Trades, IBEW and AFL-CIO representatives said although they have told politicians not to visit Acciona’s plant, they do not have the same request regarding Sempra.

Yet the political implications are understood.

“I think that’s an example of a smart politician doing her homework,” Thompson said of Titus’ cancellation. “That’s why some politicians aren’t here now. They didn’t do their homework.”

Titus spokesman Andrew Stoddard said the congresswoman plans to visit Sempra after tensions have cooled.