This photo from a July 2022 tour of the Morro Bay Power Plant property shows the area where Vistra wants to build a 600 megawatt Battery Energy Storage System. As one can see dune scrub plants have been reconquering the area since the tank farm was removed around 2012.
Story and photos by Neil Farrell
I
n a guidance letter to the City, the Coastal Commission has chimed in on the Battery Energy Storage System Project, resurrecting the specter of a fateful decision made over a decade ago on another giant project just across Morro Creek.
The Aug. 2 letter, sent to Community Development Director, Airlin Singewald, Commission Coastal Planner, Sarah MacGregor sought to give guidance on “a number of questions and issues” swirling around the BESS Project and whether it is allowable under the Coastal Act, the voter-approved law from the 1970s that created the Coastal Commission and charged it with enforcement.
Her letter was intended to clarify their understanding of the City’s Local Coastal Program (LCP), and the permitting process for the BESS. She also commented on Assembly Bill 205 (AB 205), a 2022 law that set up a process by which applicants of energy projects can appeal to the State Energy Commission to take over permitting when local authorities deny it or otherwise can’t come to a decision.
Also, voters will decide one ballot measure, A-24, in November that will surely muddy the waters for the BESS Project, and MacGregor’s letter addresses those implications as well.
In sum, the letter shows that no matter which road the project goes down, they all lead back to the Coastal Commission.
Current Conditions
MacGregor’s letter acknowledges that under the current zoning, contained within the LCP, the property is zoned “visitor-serving/commercial” and that “means the BESS is currently not an allowed use. Thus, an LCP amendment would be required in order to allow for approval of a CDP [Coastal Development Permit] application for such a project on allowable use issues alone.”
The letter runs down the process, though somewhat confusingly, but basically says the City is putting the cart before the horse. The BESS application, as a not-allowable use, isn’t supposed to be taken up until after the Power Plant Master Plan is completed and approved. That Master Plan, which the City is working on under a separate but parallel pathway, will also require an LCP Amendment. And all this has to go through the Commission, too.
“It is our understanding,” the letter said, “that given the applicant’s current CDP application with the City, an LCP amendment for the required Master Plan must be certified by the Commission prior to any local decision on the CDP; as the Master Plan would dictate the allowable development parameters for the site under the LCP.
“In addition, we note that any subsequent CDP approval by the City would be appealable to the Coastal Commission.”
Measure A-24
A lot of the opposition to the BESS is centered around Measure A-24, a citizen’s initiative on the upcoming ballot that “locks in” the current zoning on City controlled property from Beach Street out to Morro Rock, and including the power plant.
As part of the BESS, the zoning will have to be changed from visitor-serving to “industrial” for that project to be approved, a process that usually happens along with the permitting.
In essence, such projects normally approve zoning changes at the same time as environmental documents and conceptual plans (detailed construction planning comes after permits are in hand).
A-24 would require voter approval of any zoning changes in the affected area. So while not exactly directed at the BESS, A-24’s effect is to give the decision-making power to voters.
If it passes and is added to the LCP and other planning documents, it too will go to the Commission, which has authority (original jurisdiction and/or on appeal) over all such changes to planning documents within the Coastal Zone. If it passes, it’ll force the agencies to re-think how to process future applications.
“The current Master Plan LCP amendment effort and the potential ballot measure LCP amendment requirement,” the letter reads, “appear likely to intersect one another if Measure A-24 passes in November, which is likely to require some coordination on our parts if that is the case to understand the overlaps, and how best to process LCP amendment(s) pertaining thereto.”
AB 205
As if that monkey wrench weren’t enough, the State Legislature in June 2022 let loose its own curveball.
AB 205, which covers a wide array of energy issues, reads in part: “The bill would require the Energy Commission to review the application, as provided, and to determine whether to issue the certification within a specified time period. The bill would require the Energy Commission to forward the application to a local government having land use and related jurisdiction in the areas of the proposed site and related facility and would require the local agencies to review the application and submit comments on the application, as provided, thereby imposing a state-mandated local program.” (Of note: Jordan Cunningham, who was the local State Assemblyman at the time, voted “No” on AB 205.)
That means the City, as the local agency, would be reduced to commenting on an application and not being the decision-makers. MacGregor said it appears that AB 205 would override A-24, too.
“We have reviewed the law associated with AB 205, and it appears clear that the process envisioned there would render the above process [the CDP/LCP amendments] moot as it relates to City-specific efforts, but it would still require certain Coastal Commission processes to remain in effect.”
AB 205 would also require the Energy Commission to do its own Environmental Impact Report, as well as asking the Coastal Commission for a permit.
“Thus,” the letter said, “if the applicant chooses to apply for authorization for the BESS project under the auspices of AB 205, the project would require an approval from the CEC and also approval (of a CDP) from the Coastal Commission, where the standard of review for the CDP would be the Coastal Act with the LCP providing non-binding guidance.”
The City’s approved LCP would at least help guide the project review.
But just as A-24 only applies to the specific area of the Embarcadero, AB 205 only applies to energy projects.
MacGregor said in similar cases, the Commission “has historically sought to find projects consistent with underlying LCP provisions as well, although this is not a legal requirement. Thus, it is possible that the Commission could approve a CDP for a project that is inconsistent with one or more LCP provisions, although it is difficult to predict the outcome of any such application at the current time.”
Many Constraints in Play
The Commission has studied the available information and doesn’t think the 22-acre site where the BESS would be built is even available.
“It has become clearer,” the letter said, “that there are likely significant development constraints to that — or other — development in that area.”
Their biologist has determined that the project site — formerly a fuel storage tank farm — could now be protected habitat.
The Commission’s biologist, Dr. Rachel Pausch, “has determined that the proposed site for the BESS includes dune habitat, including habitat that supports special status species (such as Blochman’s leafy daisy.”
When it was in use, the site had four huge storage tanks surrounded by a tall containment berm and sitting on top of concrete slabs. In a recent tour of the property, led by Vistra’s project team, dune scrub-type plants had clearly begun to reclaim the land. The Commission, while saying that it wasn’t yet sure, stated that this could be a project killer. Their position is that the project site (22 of about 100 acres overall) could be protected in more than one way.
“Based on our current understanding it is likely the BESS area in question constitutes environmentally sensitive habitat area, or ESHA, under the Coastal Act and LCP.
“In addition, areas that might not be ESHA appear to be within the areas where required buffers of at least 50 feet would need to be applied under the LCP. Put another way, it appears that the BESS portion of the site is either ESHA or required ESHA buffer, and that, if confirmed, significantly limits what can be developed there.”
The buffer reference is to the Morro Creek channel, which is an obvious wetland and lined with thick vegetation.
The BESS is also problematic by its very nature, as the Coastal Act requires industrial uses to be “coastal dependent” that is, requiring water as part of its operations (like with seawater for cooling steam at the old power plant).
“If the ESHA analysis is confirmed, the proposed BESS project use is not allowable under the ESHA provisions of either the Coastal Act (Section 30240) or the LCP (LUP Policy C-1.2) because it is not a resource-dependent use (e.g., restoration, scientific study, low intensity interpretive recreation in some cases, etc.), and it would be expected to significantly disrupt and degrade ESHA habitat values.
“As such, and absent other relevant information to the contrary, any such non-resource dependent development, whether it’s battery storage or other such non-resource dependent development, can only be sited in non-ESHA areas and outside of required buffers at the site, where such areas appear to be limited to the existing more developed areas of the site (e.g., the former power plant building/stack area).”
The letter adds that this should be taken into consideration with the City’s work to draft a Master Plan for the power plant property (see related story). That Master Plan does not currently include the BESS project work but will ultimately have to be included in the LCP.
A shot looking directly up through the center of the
No. 1 smokestack.
Old Decision Comes Back
When the City in 2012 approved building a new sewer treatment plant next door to the existing plant (now closed) on Atascadero Road, the Coastal Commission identified several potential threats because of the location, so-called “coastal hazards,” including tsunami run up, floods and sea level rise. It also denied the project on appeal.
Now, over a decade later, that decision, which resulted in a new plant being built over 3½ miles away and far inland from the Coast, is being applied to the BESS.
“Coastal hazards concerns at the site are acute,” MacGregor’s letter said, “including regarding the current and future impacts of flooding and sea level rise at the project site, and any proposed development would have to be able to be found safe from such hazards without reliance on shoreline armoring.”
The Commission considers the 45-foot berm that surrounds the project site to be armoring of the Coast.
Opposition Loves It
While Vistra Energy is likely none too happy about the Commission’s letters, the opponents of the project and the folks who wrote and qualified A-24 for the ballot are feeling vindicated.
Estero Bay News sent word to Vistra, which is headquartered in Houston, Texas, seeking their feelings about the Commission’s two letters but didn’t hear back before deadline.
We also sought comment from the “Citizens for Estero Bay Preservation,” the main opposition group to the project and were sent a lengthy summary of the Commission’s stances in the letters by retired attorney, Jeanne Marie Colby.
She said that MacGregor, “wrote a bombshell of a letter that should make any developer think twice about applying for an industrial project on California Local Coastal Zone property that is zoned Visitor Serving/Commercial. The gist of her letter is that all roads lead back to the Coastal Commission, any attempts to circumvent the Coastal Act will fail, and that development constraints would likely prohibit such a project.”
She added that under AB 205, the project ends up in the same place as with the City’s current process. “I’m not sure what the developer would gain by undergoing the same process with the CEC, only to have its project end up back in the hands of the Coastal Commission.
She too went back to the Commission’s decision on the City’s defeated sewer plant project that the site is subject to coastal hazards.
“In accordance with their mission,” Colby said, “the Coastal Commission is signaling their intentions to once again be guided by the Coastal Act and the LCP. We should all listen, instead of speculating about how this project will be decided.”
She added, “Many facts in the BESS application are similar to those in the WWTP [waste water treatment plant] decision, except the BESS would bring additional hazards associated with volatile lithium-ion batteries that can easily encounter thermal runaway, endangering the community and wildlife.”
Public is Engaged
Like big projects of the past, Morro Bay residents haven’t been shy about letting their feelings be known. Colby, who organized a letter writing campaign in response to the BESS draft EIR, said, “Over 200 Morro Bay residents wrote comments totaling over 1,000 pages in response to the current draft EIR, with more than 93% opposed to the project. Many engaged Morro Bay residents understand the Coastal Act and its requirements for protecting the ESHA.”
She also reiterated a theme that has been running through many of the citizen comments, quoting one post on Morro Bay Next Door, “The California Coastal Commission understands that industry that is NOT ‘coastal dependent’ being built on prime marine recreational/visitor serving land is a squander of California’s greatest asset — coastal property.
“You can build a BESS anywhere on California’s thousands of square miles of arid inland property, safely away from residential areas and sensitive wildlife sanctuaries, but you can only enjoy California’s Coast at the Coast.”
Morro Bay a Leader
So once again Morro Bay will be leading the way for the state. With the Duke project, it was the first attempt by an energy company to modernize an existing power plant after the energy sector was “deregulated” in the late 1990s, which started an influx of out-of-state companies, like Duke from North Carolina, to buy into the system, modernize the aging equipment and cash in on the new energy open markets. Duke was first to propose replacing plants, with Morro Bay being the first to be proposed.
The CEC was entirely in charge of that project review, which took over 7 years and they never did get a permit. It was a process that while it had been on the books for a long time, never really was used, as power plants were not exactly opening here all the time. Morro Bay was one of a fleet of old power plants that deregulation was in part hoping got replaced.
But Duke ran head-long into a wall of opposition seeking to change Morro Bay from what one Duke man quipped was “a little bitty town with a great big power plant right in the middle.”
It remains to be seen if that same kind of organized citizen opposition can win its fight against the BESS.
