Tesla Cited for Air Pollution Violations. Its Penalty? Build a Community Microgrid

May 8, 2021
Tesla has agreed to pay a $1 million penalty and build a community microgrid in a settlement reached last week with a California air quality board.

Tesla has agreed to pay a $1 million penalty and build a community microgrid in a settlement reached last week with a California air quality board.

The settlement covers 33 air quality notices issued by the San Francisco Bay Area Air Quality Management District for activity at Tesla’s Fremont manufacturing facility, where it builds electric vehicles.

The unusual penalty — requiring the company to build a microgrid along with paying a more conventional fine — represents the air district’s efforts to maintain “strict compliance with air pollution regulations while seeking mutually beneficial solutions for the community,” according to Jack Broadbent, air district executive officer.

“As part of this settlement, Tesla has agreed to implement a community microgrid project, which leverages the company’s technological expertise in developing next generation power here in the Bay Area,” he said.

The microgrid will be built in a yet-to-be specified community that is heavily impacted by air pollution, as designated under the air district’s Community Health Protection Program.

The community microgrid will be designed to reduce electricity costs, reduce local air pollution and provide electricity during power outages, which have become more frequent in California because of wildfires. Utilities in the state engage in what’s known as public safety power shutoffs, a practice of turning electricity off to customers if they believe risk exists that power lines will spark wildfires.

The microgrid will use 160 kW of solar, paired with battery energy storage.

The settlement agreement also requires that Tesla install a comprehensive environmental management system, which will track environmental requirements and ensure that the company’s managers are trained on what is needed to comply with them.

Tesla was cited for a range of violations, including emissions exceeding its permit limits, installing or modifying equipment without proper permits, failure to conduct required emissions testing, failure to maintain records and failure to report information to the air district in a timely manner. 

Don’t miss the lively panel discussion, “The Green Energy Balancing Act: How Microgrids Steady the Scale,” scheduled for May 25 at Microgrid 2021, a virtual conference hosted by Microgrid Knowledge. Registration is free if done in advance. Choose from among the 20 sessions offered May 11-June 3. Or join us for all of them!

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

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