The board approved an amended energy storage service agreement for a nearly 50 megawatt, four‑hour battery project in Chula Vista sited at an existing natural gas plant site.

Staff said the project was originally approved in 2024 and is now being brought back after the developer secured a conditional use permit. The project uses Tesla Megapack technology and is contracted for a 15‑year term. Power contracts staff said the amendment was negotiated to address tariff‑driven cost increases faced by developers while protecting ratepayers through stronger operational guarantees, additional permitted charge/discharge cycles and stepped price reductions if the project misses its guaranteed commercial operation date.

Local benefits and labor
Staff highlighted local benefits negotiated by the developer: a project labor agreement for construction and a maintenance labor agreement for ongoing operations, plus community benefits the developer agreed with the local authority (staff cited roughly $200,000 for local community projects such as scholarships and park improvements in supporting comments). The project has been designated as deliverable for resource adequacy, staff said.

Why it matters
The battery will help provide local capacity and ancillary services, reduce reliance on peaking gas generation at the site over time, and support regional resource adequacy. Staff said siting storage at existing thermal plant sites leverages existing transmission interconnection and can reduce local grid reliance on gas peaking capacity.

Board action
The board approved the amended agreement by roll call vote. There was no public comment on the item.

Ending
Staff said they will hold the developer to aggressive commercial operation schedule provisions and that the contract includes protections that reduce price if the project slips beyond the agreed timeline.