Morro Bay moves forward with attempt to block battery storage facility

November 15, 2024

By KAREN VELIE

The Morro Bay City Council on Tuesday voted 4-0 to direct staff to construct an urgency ordinance on a potential Battery Energy Storage Systems (BESS) project, with Councilwoman Jen Ford recusing herself. The council plans to vote on the proposed urgency ordinance in January.

An urgency ordinance would provide a temporary pause of up to two years on the processing of new BESS projects. During that time, the council can work on a permanent ordinance to block the controversial project.

Vistra, a Texas-based energy company, has plans to construct and operate a 600-megawatt battery storage facility on approximately 24 acres of a roughly 70-acre site. However, residents, concerned the facility will endanger the public while negatively impacting tourism and the fishing industry, pushed a local ballot initiative to stop Morro Bay from permitting the project.

Morro Bay, residents largely supported the measure requiring voter approval for changes to some zoning on the waterfront. Vistra Energy, the company behind a proposed 24 acre battery storage facility on the waterfront, decided to seek state approval while bypassing the city’s consideration shortly before the November election.

Even so, a large amount of the funding for the battery storage facility is slated to be provided through the Inflation Reduction Act, which includes $369 billion in subsidies for renewable energy.

“The Inflation Reduction Act is anticipated to provide the opportunity to realize material benefits to Vistra with respect to its renewables and energy storage projects, as well as provide strong price support via the nuclear production tax credit for its nuclear facilities, including those acquired through the Energy Harbor transaction,” Vistra said in a first quarter 2024 press release.

With Trump in office, it is anticipated he will ask Congress to reduce or eliminate tax credits provided through the Inflation Reduction Act. Without the subsidies and tax credits, it is unlikely Vistra will move forward with its plan for battery storage in Morro Bay.

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