Quick Take
Santa Cruz County supervisors postponed battery storage rules until August 2026, a delay that could push developer New Leaf Energy to sidestep local review and seek faster state approval for its $200 million project.
Against the backdrop of a highly contentious and long-developing battery storage proposal outside of Watsonville, Santa Cruz County lawmakers earlier this month agreed to hold off on crafting local rules around the utility-scale technology until as late as August 2026.
“Surprised and disappointed” is how Max Christian, representative from New Leaf Energy — the developer behind the proposed battery project — described his reaction to the decision. New Leaf Energy first proposed its $200 million, 200-megawatt “Seahawk” battery storage plant in December 2024 — three weeks before a Moss Landing facility went up in flames, souring public sentiment overnight on the clean energy technology.
Since last August, county staff have been working to develop a new zoning overlay that would allow battery storage facilities near three power substations – in Aptos, just outside of Watsonville and in Live Oak. But local rules would also ensure that county lawmakers retain the discretion to shape any proposal seeking such permits and to determine whether the battery project has a “significant benefit to the public health, safety and welfare,” according to a staff report.
Until a local battery ordinance is established, New Leaf cannot obtain permits through a local process — one that would involve analysis by county staff, approvals by the environmental and planning commissions, and a final OK from the board of supervisors, with plenty of opportunity for public comment in between. Now, Christian said his company could pursue a state path that allows projects like Seahawk to skip the local process, minimize local control and obtain permits within a year to build the battery storage facility.
Christian has so far been adamant that New Leaf prefers the local process, and that skipping over it would “run counter to our principles.” However, the Moss Landing catastrophe has ratcheted up opposition to the project and made local officials wary of moving too quickly in developing the county’s own battery rules.
In the meantime, Christian said New Leaf Energy has had to pay millions of dollars in non-reimburseable deposits to the California Independent System Operator — which manages the flow of electricity through the state — to hold its place in the long line of energy projects trying to connect to the state’s power grid.
Christian said the deposits have squeezed New Leaf’s finances and forced the company to self-impose a deadline. He wouldn’t publicly disclose the precise cutoff date — citing concerns over competitive advantage — but said if the county’s ordinance isn’t set by then, the company would skip the local process and seek permits through the state.
“Losing local control I think would be a terrible outcome for Santa Cruz County, and we don’t want it,” said Christian, who has been meeting with groups in South County almost weekly to discuss the differences between New Leaf’s proposal and the Moss Landing facility. “But we wouldn’t give up a very good project with very good benefits for the community and the power grid. August 2026 would be too late for the project to remain viable. I think we would have to consider the state route as a possibility.”
On Aug. 19, supervisors unanimously voted to defer action on a new county battery ordinance and asked staff to come back with updates at or before its second meeting in August 2026.
District 3 Supervisor Justin Cummings, who pushed for the delay, said then that the ordinance could come back earlier, but thought the August 2026 date allowed enough time for more studies on the impacts of the Moss Landing fire, and for the state legislature to pass state Sen. John Laird’s bill that would enhance fire safety requirements for projects like Seahawk.
District 4 Supervisor Felipe Hernandez, whose district encompasses the Minto Road address where Seahawk is proposed, called it urgent that the supervisors pass an ordinance before next summer.
“We want local control, we want it to go through our departments and commissions and public comment,” Hernandez told Lookout on Thursday. “We don’t want them to just bypass the local government.”
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