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Ordinance Number 1119URGENCY ORDINANCE NO. 1119 AN INTERIM ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO EXTENDING URGENCY ORDINANCE NO. 1116 PROHIBITING NEW COMMERCIAL BATTERY ENERGY STORAGE SYSTEMS WITHIN THE CITY OF SAN JUAN CAPISTRANO, ADOPTED AS AN URGENCY MEASURE; AND FINDING THE ACTION TO BE EXEMPT FROM CEQA WHEREAS, the City of San Juan Capistrano, California (“City”) is a municipal corporation, duly organized under the constitution and laws of the State of California; and WHEREAS, in general, a Battery Energy Storage Systems (“BESS”) facility collects energy from the grid, stores it, and then discharges that energy later to provide electricity or other grid services when needed, typically at times of high demand; and WHEREAS, Engie North America (“Applicant”) is proposing to construct a BESS facility on land currently owned by Saddleback Church located at the northern end of the city; and WHEREAS, in December 2021, the City received entitlement applications and a letter of intent from the Applicant requesting to establish a BESS facility within the Planned Community (“PC”) District zoning designation; and WHEREAS, the PC District zoning designation allows uses and structures permitted within the city subject to the approval of a Comprehensive Development Plan (“CDP”) consistent with the General Plan, pursuant to San Juan Capistrano Municipal Code (“Municipal Code”) Section 9-3.315(b). In the absence of an approved CDP, the PC District zoning designation allows identified interim uses pursuant to Municipal Code Section 9-3.315(c) subject to the development standards for the Agri-Business District, pursuant to Municipal Code Section 9-3.315(e)(3); and WHEREAS, the Planning Director has the authority and responsibility to review uses not listed in the Municipal Code and permit such proposed unlisted use if it falls within the purpose and intent of the base district, is of a comparable nature to the principal, accessory, or conditional uses set forth in the base district, is not listed in the base district, and will not be detrimental to property in the vicinity of such use pursuant to Municipal Code Section 9-3.203; and WHEREAS, on April 29, 2022, the Development Services Director determined that a BESS facility cannot be accommodated by an unlisted use determination under Municipal Code Section 9-3.203 as the required findings could not be met. As such, the preparation and approval by the City Council of a CDP would be required to allow the proposed use; and WHEREAS, in September 2022, Saddleback Church submitted a request for the City Council to initiate a Rezone study to establish a CDP that would govern the Ordinance No. 1119 May 7, 2024 2 approximately 161-acre Saddleback Church Rancho Capistrano property. On November 1, 2022, the City Council denied the initiation of a Rezone study to create the proposed CDP; and WHEREAS, the City’s current Zoning Regulations do not contain criteria specifically for BESS facilities; and WHEREAS, pursuant to Assembly Bill 205, an applicant proposing to build a qualifying energy facility may file an “opt-in application for certification” at the California Energy Commission (“CEC”) and the CEC’s permitting authority over the proposed project is “in lieu of any permit, certificate, or similar document required by a state, local, or regional agency, or federal agency, to the extent permitted by federal law, for those facilities”; and WHEREAS, in reviewing so-called opt-in projects, the CEC functions as the Lead Agency for purposes of California Environmental Quality Act (“CEQA”) review and must make certain findings in certifying an opt-in project; and WHEREAS, in early 2023, Applicant opted to pursue a State approval process through the CEC, as opposed to seeking local approval through the City Council, and in February 2024, the Applicant formally withdrew its City applications; and WHEREAS, in a letter dated April 18, 2024, the CEC provided notice to the City of the CEC’s receipt of an opt-in application for the Compass Battery Energy Storage project (24-OPT-02) (the “Opt-In Notice”). The application seeks to construct, own, and operate an approximately 250-megawatt (“MW”) BESS in the City of San Juan Capistrano. The BESS would be capable of storing up to 250 MW of electricity for four hours (up to 1,000 MW hours). The project would be composed of lithium-iron phosphate batteries, or similar technology batteries, inverters, medium voltage transformers, a switchyard, a collector substation, and other associated equipment to interconnect into the existing San Diego Gas & Electric (“SDG&E”) Trabuco to Capistrano 138-kilovolt transmission line located approximately 500 feet from the project site and approximately 90 feet from the project property. The project would connect to the SDG&E electric transmission system via a proposed loop-in transmission line that would be constructed to transfer power to and from the proposed project. The loop-in transmission line would be supported by the replacement of two existing transmission poles and construction of one new transmission pole. Electric energy would be transferred from the existing power grid to the project batteries for storage and from the project batteries to the power grid when additional electricity is needed. No off-site transmission upgrades are required for the full capacity of the project, and an interconnection agreement with SDG&E and the California Independent System Operator has been executed. Following the construction of the switchyard by Applicant, ownership and operations would transfer to SDG&E; and WHEREAS, this action by the Applicant to file the application with the CEC increases the urgency for the City to evaluate if, how, and where commercial BESS facilities can be accommodated safely within the city; and Ordinance No. 1119 May 7, 2024 3 WHEREAS, once CEC deems the application complete, CEC will be under a 270- day period to certify the project; and WHEREAS, while the Applicant’s proposed project may no longer require local entitlement approvals, there remain significant public safety-related concerns that must be analyzed prior to any BESS project moving forward within the city; and WHEREAS, there have been several fires at BESS facilities both in California and nationwide while the proposed location is near established residential neighborhoods in San Juan Capistrano and downslope of several hundred homes in Laguna Niguel; and WHEREAS, should a fire occur at the proposed BESS site adjacent to Trabuco Creek, an environmentally sensitive watercourse that flows to the ocean, fire extinguishing compounds used to combat the fire (either from the ground or air) would have the potential of entering the creek and significantly impairing water quality and native flora and fauna; and WHEREAS, Senate Bill 38 (“SB 38”) requires every BESS facility in California to coordinate with local emergency management agencies, unified program agencies, and local first responders to develop an emergency response and emergency action plan for the facility to protect surrounding residents, neighboring properties, emergency responders, and the environment, and submit said plan to the county and the city where the facility is located; and WHEREAS, SB 38 recognizes the many hazards that BESS facilities create, as it provides that the mandated emergency response and action plan may consider responses to potential offsite impacts, such as poor air quality, threats to municipal water supplies and water runoff, and threats to natural waterways. The plan may also include procedures related to shelter-in-place orders and road closure notifications; and WHEREAS, California Government Code Section 65858 provides that, without following the procedures otherwise required prior to the adoption of a zoning ordinance, an urgency measure in the form of an interim ordinance may be adopted by a four-fifths vote of the City Council to protect the public from a current and immediate threat to the public health, safety, or welfare resulting from a contemplated zoning proposal; and WHEREAS, Government Code Section 65868 further provides that such an urgency measure shall be effective for only forty-five days following its adoption, but may be extended beyond the initial forty-five day period, following compliance with that Section, for an additional ten months and fifteen days and subsequently for an additional twelve months; and WHEREAS, at its April 2, 2024, City Council meeting, staff’s findings demonstrated that the potential for development of new commercial BESS facilities within the city without adequate land use policies and standards in place to implement SB 38 and to prevent potentially catastrophic interference with nearby communities presents a current and immediate threat to the public’s safety and welfare, and the approval of use permits, building permits, or other applicable entitlements for such uses would threaten public Ordinance No. 1119 May 7, 2024 4 safety and welfare; and WHEREAS, at its April 2, 2024, meeting, the City Council voted to approve an interim ordinance prohibiting new commercial battery energy storage systems within the city, unless a use permit was approved prior to April 2, 2024, based upon a need for the immediate preservation of the public health, safety, and welfare as set forth herein, for an initial period of forty-five days while staff researched and selected the best recommended course of action to address the safety-related concerns regarding BESS facilities (“Urgency Ordinance No. 1116”); and WHEREAS, the temporary prohibition on BESS facilities is scheduled to expire on May 17, 2024; and WHEREAS, staff has issued a written report to the City Council on the progress of its study along with measures taken to alleviate the condition that led to the adoption of Urgency Ordinance No. 1116; and WHEREAS, City staff is still in the process of conducting research to understand the impacts of BESS facilities and uses on community welfare and explore potential amendments to the City’s Municipal Code and General Plan in relation to BESS facilities; and WHEREAS, staff remains concerned that the absence of adequate land use policies and standards to address BESS facilities, including those necessary to implement SB 38 and prevent potentially catastrophic impacts to nearby residents and environmental resources, poses a current and immediate threat to the public’s safety and welfare; and WHEREAS, in light of the significant safety risks associated with BESS facilities, City staff seeks additional time to further investigate these issues, formulate recommendations for City Council consideration, and explore adjustments to the City’s General Plan and Zoning Regulations to mitigate the safety risks associated with BESS facilities. NOW, THEREFORE, the City Council of the City of San Juan Capistrano does ordain as follows: Section 1. The recitals above are each incorporated by reference and adopted as findings by the City Council. Section 2. This Interim Ordinance is not subject to the CEQA (Public Resources Code §21000, et seq.) pursuant to CEQA Guidelines (Cal. Code Regs., tit. 14, §15000 et seq.) Section 15060(c)(2) [activity will not result in a direct or reasonably foreseeable indirect physical change in the environment]. Here, this Interim Ordinance is merely extending the current prohibition on certain projects from proceeding for a period of time during which the City will study the potential development. As a result, this Interim Ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment. Further, the 10-Day Report merely describes actions previously taken to alleviate the conditions which led to the adoption of Urgency Ordinance No. 1116. Ordinance No. 1119 May 7, 2024 5 Alternatively, this Interim Ordinance is exempt from CEQA under CEQA Guidelines Sections 15061(b)(3) [it can be seen with certainty that there is no possibility the activity in question may have a significant effect on the environment], and, in the alternative, 15307 [Class 7 categorical exemption for regulatory activity to assure the protection of natural resources], and, in the alternative, 15308 [Class 8 categorical exemption for regulatory activity to assure the protection of the environment]. Here, this Interim Ordinance will extend the current prohibition on certain projects from being able to proceed for a period of time during which the City will study the potential development. This activity is meant to assure the protection of the environment and natural resources by studying the hazards associated with BESS facilities, such as unique fire and explosion hazards, for potential development of zoning regulations for BESS facilities. Currently, there are no commercial BESS facilities in the city. This Project merely preserves the status quo. Further, the 10-Day Report merely describes actions previously taken to alleviate the conditions which led to the adoption of Urgency Ordinance No. 1116. Alternatively, this Interim Ordinance is exempt from CEQA pursuant to Public Resources Code Section 21080(b)(4) and CEQA Guidelines Section 15269(c) because it prevents a clear and imminent danger that requires immediate action to prevent or mitigate the loss of, or damage to, life, health, property, and essential public services. Here, this Interim Ordinance will extend the current prohibition on certain projects from being able to proceed for a period of time during which the City will study the potential development. This activity is meant to prevent or mitigate the loss of, or damage to, life, health, property, and essential public services by studying the hazards associated with BESS facilities, such as unique fire and explosion hazards, for potential development of zoning regulations for BESS facilities. Further, the 10-Day Report merely describes actions previously taken to alleviate the conditions which led to the adoption of Urgency Ordinance No. 1116. Section 3. This Interim Ordinance is urgently needed for the immediate preservation of the public health, safety, and welfare based on the findings of this Interim Ordinance and corresponding action report. This Interim Ordinance shall take effect immediately upon adoption. Section 4. Urgency Ordinance No. 1116 is hereby extended for ten months and fifteen days, unless earlier repealed by the City Council or extended in accordance with the provisions set forth in California Government Code Section 65858. Section 5. No use permit, variance, building permit, business license, or any other entitlement for use shall be approved or issued for the establishment, construction, or operation of a commercial BESS facility for any location or property within the City of San Juan Capistrano, unless a use permit was approved prior to April 2, 2024, authorizing the establishment, construction, and operation of the commercial BESS facility, in which case the commercial BESS facility may continue in operation as approved but may not be replaced or modified in any manner that would require revision or amendment to the use permit under the City’s Zoning Regulations. As used in this ordinance, the term “commercial” means the use of a BESS facility to provide electricity to third parties, for consideration. Ordinance No. 1119 May 7, 2024 6 Section 6. The penalties for land use violations that are prescribed in Section 9- 1.201 of the Municipal Code shall apply to violations of the provisions of this Interim Ordinance. Section 7. If any provision of this ordinance or its application to any person or circumstance is held to be invalid, such invalidity has no effect on the other provisions or applications of the ordinance that can be given effect without the invalid provision or application, and to this extent, the provisions of this resolution are severable. The City Council declares that it would have adopted this resolution irrespective of the invalidity of any portion thereof. Section 8. The City Council hereby directs staff to prepare, execute, and file with the County of Orange Clerk a notice of exemption within five (5) working days of the adoption of this Ordinance. Section 9. The Custodian of Records for this Interim Ordinance is the City Clerk and the records compromising the administrative record for this Interim Ordinance are located at 32400 Paseo Adelanto, San Juan Capistrano, CA 92675. PASSED, APPROVED AND ADOPTED by the City Council of San Juan Capistrano, California, at a regular meeting of the City Council held on the 7th day of May, 2024. City of San Juan Capistrano ________________________________ SERGIO FARIAS, MAYOR ATTEST: ________________________________ CHRISTY JAKL, ACTING CITY CLERK Ordinance No. 1119 May 7, 2024 7 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF SAN JUAN CAPISTRANO ) I, CHRISTY JAKL, Acting City Clerk of the City of San Juan Capistrano, do hereby certify that the foregoing is a true and correct copy of Urgency Ordinance No. 1119 was duly adopted and passed at the Regular Meeting of the City Council on the 7th day of May 2024 by the following vote, to wit: AYES: COUNCIL MEMBERS: Taylor, Campbell, Hart and Mayor Farias NOES COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: Mayor Pro Tem Bourne _____________________________________ CHRISTY JAKL, ACTING CITY CLERK STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss AFFIDAVIT OF POSTING CITY OF SAN JUAN CAPISTRANO ) I, CHRISTY JAKL, declare as follows: That I am the duly appointed and qualified City Clerk of the City of San Juan Capistrano; That in compliance with State laws, Government Code section 36933(1) of the State of California, on the 2nd day of May 2024, at least 5 days prior to the adoption of the ordinance, I caused to be posted a certified copy of the proposed ordinance entitled: AN INTERIM ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO EXTENDING URGENCY ORDINANCE NO. 1116 PROHIBITING NEW COMMERCIAL BATTERY ENERGY STORAGE SYSTEMS WITHIN THE CITY OF SAN JUAN CAPISTRANO, ADOPTED AS AN URGENCY MEASURE; AND FINDING THE ACTION TO BE EXEMPT FROM CEQA This document was posted in the Office of the City Clerk ________________________________ CHRISTY JAKL, ACTING CITY CLERK San Juan Capistrano, California Ordinance No. 1119 May 7, 2024 8 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss AFFIDAVIT OF POSTING CITY OF SAN JUAN CAPISTRANO ) I, CHRISTY JAKL, declare as follows: That I am the duly appointed and qualified City Clerk of the City of San Juan Capistrano; that in compliance with State laws, Government Code section 36933(1) of the State of California. On the 8th day of May 2024, I caused to be posted a certified copy of Urgency Ordinance No. 1119, adopted by the City Council on May 7, 2024, entitled: AN INTERIM ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO EXTENDING URGENCY ORDINANCE NO. 1116 PROHIBITING NEW COMMERCIAL BATTERY ENERGY STORAGE SYSTEMS WITHIN THE CITY OF SAN JUAN CAPISTRANO, ADOPTED AS AN URGENCY MEASURE; AND FINDING THE ACTION TO BE EXEMPT FROM CEQA This document was posted in the Office of the City Clerk ________________________________ CHRISTY JAKL, ACTING CITY CLERK San Juan Capistrano, California