A proposed 200 MW battery storage facility near Watsonville is facing delays as Santa Cruz County's permitting process remains unresolved. The developer, New Leaf Energy, is considering a shift to the state approval pathway as financial pressures increase due to substantial non-refundable deposits to the California Independent System Operator. County supervisors have postponed local rule-making until August 2026, increasing the likelihood of the developer bypassing local oversight.
Background
In December 2024, New Leaf Energy submitted an application to the county for the "Seahawk" battery energy storage system (BESS) on Minto Road outside Watsonville. The project proposes a capacity of 200 MW and 800 MWh. County officials began drafting a zoning ordinance to regulate BESS facilities, but the application is stalled and remains incomplete. Environmental review of the zoning measure has been postponed, with possible adoption now targeted for August 2026. The delay raises the prospect of New Leaf pursuing a streamlined state-level approval process.
Details
New Leaf has paid millions in non-refundable deposits to the California ISO to secure its interconnection position, raising financing risks as project timelines extend. Max Christian, a New Leaf representative, stated that without finalized local rules by next summer, the company could be compelled to pursue state permitting. Under the state process, the California Energy Commission could override local zoning to expedite approval, potentially within one year.
Community members and county officials have cited concerns about safety, environmental impact, and agricultural land use. In January 2026, the county approved a BESS safety ordinance establishing buffer zones, fire safety plans, and environmental safeguards. The ordinance is consistent with Senate Bill 283, which requires early fire agency coordination, independent safety inspections, and compliance with NFPA 855 fire codes.
New Leaf has assured city and county officials that the proposed facility will incorporate advanced fire suppression and comply with all safety standards. However, local regulations remain unsettled, and community input continues to shape the permitting process.
Outlook
If Santa Cruz County does not enact its ordinance by mid-2026, New Leaf may submit a pre-application to the California Energy Commission, circumventing local review. Pursuing the state approval path could alter project financing and influence broader policy discussions over centralized versus local authority for battery storage siting in California.
