While not exactly like a gunfight in the middle of a dusty street in the Old West, there is a showdown brewing in Morro Bay over a huge industrial project, and the first salvo is expected to land soon.
Barry Branin of “Citizens For Estero Bay Preservation” announced Aug. 10 that they had finished a petition drive to put an initiative on the next ballot that would require the City to get voter approval to change the zoning for Vistra Energy’s so-called “Battery Energy Storage System” or BESS project.
That project is well into the environmental impact review by a City consultant who is being paid for by Vistra.
The old power plant was first begun in the mid-1950s (Units 1 & 2) and completed in the early 1960s (Units 3 & 4), prior to this it had been a Navy Training Base during World War II.
While it might have seemed to be forever to readers who grew up here, it closed for good nearly a decade ago and the City was expecting to redevelop it.
The City rezoned the roughly 100-acre power plant property located on the Embarcadero to Commercial/Visitor-Serving (C/V-S) as part of an update of the General Plan/Local Coastal Program completed in 2021.
That update took over a decade and started after the power plant was all but closed. It finally did close for good in 2014 and rezoning the property seemed like a good idea, until Vistra proposed its battery storage plant. By then, the GP/LCP update was mostly done with local review and was sent off to the Coastal Commission for final approval.
In order for Vistra to now get approval of its 600 megawatt BESS, the zoning needs to be changed back to industrial.
Petition Drive A Hit
Local voters apparently couldn’t wait to sign the petitions.
The initiative, which is opposed by business leaders and others in the community, needs 815 verified signatures of Morro Bay registered voters to qualify for the ballot. The Preservation group sailed right past that number.
“The committee members for Citizens For Estero Bay Preservation,” Branin said in a news release, “in just over two months collected 1,486 signatures in support of our initiative. We are proud that the 2021 General Plan land use designation of North Embarcadero Road as Visitor Serving Commercial and Coleman Drive as Commercial/Recreational Fishing will be reaffirmed.”
City Clerk Dana Swanson will go through a verification process and if enough signatures check out, she will present it to the City Council.
The Council will then decide whether to place the initiative on a ballot, most likely the March 2024 Primary Election, or they could simply vote to accept the initiative’s premise and codify it into law.
That’s what a previous council did with a petition drive that would have put a ballot measure up asking voters to ban overnight camping along the Embarcadero and Morro Rock. That petition drive was in opposition to an RV camping program the Harbor Department put together, scattering over 20 campsites in different areas along the Embarcadero, including several in a vacant spot adjacent to Morro Creek, and three, highly visible campsites at Coleman Park.
Mayor Says ‘No Comment’
Asked by a reporter what her position was on the initiative, Mayor Carla Wixom declined to answer, saying that she can’t comment on a project that hasn’t yet come before the council, as it would be unfair to Vistra and possibly violate a Memorandum of Understanding the City signed with the company regarding the BESS Project.
In essence the City agreed to give the project a fair hearing and honest review, and Vistra promised to tear down the old power station building and three smokestacks by 2028 or pay the City $3 million.
Mayor Wixom did however say that she expects the council will pass it on to voters to decide.
EBN sought comment from Vistra on this turn of events and got a statement back from Jenny Lyon, Vistra’s Manager for Media Relations:
“Vistra remains excited about the opportunity to partner with the City and local community on the redevelopment of the decommissioned Morro Bay Power Plant site and to help California advance its renewable energy goals. Further information on the specifics of the project will be shared during the public process.”
EIR Expected Soon
The Draft EIR for the battery project is expected to be released sometime in the coming months, which will start the clock truly ticking on the greater showdown that’s almost sure to follow.
One tidbit of a nugget is that if the initiative is approved on next March’s ballot, it could be in play as soon as the General Election in November 2024, if the project is at the point in the process where a land use change approval is needed. And again, all it would do is put it to a vote.
However, the BESS Project will likely be contested much longer than those turns in the ballot box.
A Duke Repeat?
Just as when Duke Energy tried to push through a project to replace the old power plant with a new, modern generating station, the final say isn’t likely to be made in Morro Bay.
Indeed, the State Legislature has fired a salvo of its own with the passage into law of Assembly Bill 205. That law expands the California Energy Commission authority to assume permitting under the California Environmental Quality Act (CEQA) of green energy projects like the BESS and other storage facilities in the state.
The CEC could take over if the applicant can’t get passed the local authority (city or county). Some have called AB 205 “Life After Death,” in that a project totally rejected by a local permitting agency, can apply to the CEC to take it over, and presumably have a second chance at life.
Facilities like the proposed $490 million BESS, which is projected to store excess energy produced by solar and wind generators, in tens of thousands of lithium-ion batteries. This excess energy would presumably be produced when the sun is shining and the wind blowing.
The battery plant would then feed the electricity into the power grid for use after the sun goes down and help meet demand after solar is done for the day. It’s seen as one of the ways to cover the supply-demand gap created by solar and wind energy generation.
Indeed, there are a total of three storage projects being looked at now in the North Coast Area. The others are the Pecho Energy Center (in Chorro Valley) and a hydropower storage facility in the hills above Whale Rock Reservoir.
All three of these projects are being reviewed by different agencies and on different levels of government. The Pecho plant is under the CEC; the Whale Rock facility as a dam project is under the Federal Bureau of Land Management (BLM); and Vistra’s BESS is under the City’s purview.
What Me Worry?
So what’s all the fuss about? If built as proposed, Vistra’s plant at 600 MW would be the world’s largest battery storage facility.
Opponents fear it is too dangerous, as lithium-ion batteries can catch fire and the site, in the middle of town and just a couple hundred yards from Morro Bay High, is inappropriate for that use.
They fear the toxic cloud that could rise high into the air and spread far and wide if the worst thing imaginable happens and the BESS burns.
Those who oppose the initiative and in turn support Vistra’s project, argue that the initiative and the way it locks in the C/V-S zoning would more than double the size of the existing tourism areas along the waterfront.
The Chamber of Commerce is on record supporting industrial use. In an official policy declaration dated January 2023 and long before the initiative was hatched, the Chamber said, “The portions of the property north of the main entrance/power building/switchyard and south of Morro Creek should be changed to a designation that permits energy storage, and uses to support landside wind energy operations, energy transmission, energy production, and general industrial uses.”
A Lot Riding On It
Though it doesn’t exactly ban nor even mention the BESS Project, the initiative has a lot riding on it, if only as a symbolic gesture.
It could be seen as a definitive statement on the community’s feelings about the project. If voters in March overwhelmingly approve it, it would be a powerful message to the City Council on how the community feels about the project, even though it doesn’t address Vistra’s proposal directly. And no matter if the Council votes for or against the BESS, voters here will have the say on changing the zoning. Still, the State could step in.
That’s another fear the opponents have stated, that if the CEC takes it over, the City and citizens’ desires or conditions for approval would be ignored.
That could be a significant concern, as the City is expected to work out an agreement with Vistra on the project that would bring some new, significant revenues into the City treasury. With Duke’s project, the City would have gotten a minimum of $2 million a year for some 50 years, with some of that going to the Harbor Department, which is in dire need of more revenues.
AB 205 a Lifesaver
AB 205 appears to be a work-around for big energy companies and a path to sidestepping local opposition. Initiative proponents feel it will mean loss of local control. But what can it really do?
According to a synopsis of AB 205 by the energy project law firm Cox Castle of San Francisco, under the heading “Approval of Projects Noncompliant with Local Zoning Laws:”
“If the Commission [CEC] finds that a project is noncompliant with state, local or regional ordinance or regulation, it is required to ‘consult and meet with the state, local or regional government agency concerned to attempt to correct or eliminate the noncompliance.’
“If, however, the noncompliance cannot be corrected or eliminated, the CEC can still approve the project if it determines that the facility is required for public convenience and necessity and that there are not more prudent and feasible means of achieving public convenience and necessity.”
As with other laws passed to address complex things, AB 205 is a bit fuzzy.
“Public convenience and necessity,” the synopsis continues, “is not defined in the Public Resources Code or in the Public Utilities Code but this language appears in Public Utilities Code Section 1001 and it appears likely that the Legislature intended to apply a similar concept in a new context. There is substantial case law on the meaning of ‘public convenience and necessity,’ however, an analysis of its meaning is beyond the scope of this memorandum.”
In any event, AB 205 seems to have been intended as a lifeline for developers of so-called green energy projects.
“The CEC opt-in could provide a ‘life-after-death’ scenario for certain projects that are consistent with local law, regulations and ordinances but have nonetheless been denied by local governments based on subjective concerns about community character, property values and other local issues.
“The CEC opt-in may also assist new projects and the repowering of existing projects in jurisdictions that have enacted moratoria or flat-out prohibitions. It may also assist projects that are currently in the pipeline and that are not yet approved or denied.”
Law Could Be a Club
AB 205 could be a bludgeon instead of a shield. “The ability to opt-in to CEC jurisdiction because of concerns about local government views or after denial at the local level,” the Cox Castle synopsis said, “could incentivize local agencies to approve of [rather than deny] projects on their own terms rather than having terms and conditions dictated to them by a state-level agency.
“Finally, if the CEC proves itself adept at approving renewable energy projects quickly, fairly and efficiently, it could become the preferred forum for the majority of renewable energy projects located on private land in California.”
AB 205 is of course supported by industry. “While it is unknown how many developers avail themselves of this new permitting pathway,” Cox Castle said, “most renewable developers welcome the option of a state-level process, putting California in the good company of the States of New York, Washington, and Oregon, all of which have adopted state level review and permitting for renewable energy projects.”
Placing restrictions on local government with regards to zoning for big development projects has worked before in Morro Bay, but it appears the State Legislature and Governor, who signed AB 205 into law last June, are a step ahead of that move.