Consider and take action on the zoning change request from Alpha Omega Power, LLC to rezone from District "F" (Light Industrial) to District "S-P" (Site Plan) for development of an electric power generating station utilizing lithium-ion battery energy storage system (BESS). Located at 701 Hwy 146 N., and north of the existing Golden Rule Logistics.
Submitted For:
Kim Golden, Transportation and Planning
Submitted By:
Veronica Carreon, Transportation and Planning
Department:
Transportation and Planning
Information
ACTION REQUEST
Alpha Omega Power LLC is requesting a zoning change for 6.29 acres from District "F" (Light Industrial) to District "SP" Site Plan for the development of a proposed electric power generating station utilizing lithium ion battery energy storage system (BESS). The site is located at 701 S.H. 146 which is on the west side of SH 146, north of Golden Logistics, LLC and south of Baker Distributing.
As a BESS installation the application is being processed as a District SP (Site Plan) rezoning consistent with Section 160.051(A)(1)(f) provide for the development of specific uses which are not normally found in zoning districts, and (h) provide additional information and regulatory controls concerning the proposed use or uses for the protection of the public health, safety, morals and general welfare of the community.
BACKGROUND (Brief Summary)
The applicant is AOP Holdings, LLC d/b/a Alpha Omega Power, which was established in 2023. The proposed project, Southern Select Energy, will encompass approximately 5.71 acres on 6.29 acres of vacant land. The location of the project is on the west side of S.H 146 N and north of the existing Golden Logistics. The property owner is LM Storage, LLC. The property is zoned District F. The project proposes to develop up to 106 lithium-ion battery containers for 205MW, 410MWh capacity at the site.
PROPOSED SITE IMPROVEMENTS - The Site improvements will include a 20ft concrete perimeter fire lane with access to all containers and two access roads as required by the Fire Marshal, security fencing, and landscaping of at least 6ft in height to provide screening of the battery containers from S.H. 146. The fencing along SH 146 will be a 6ft masonry wall. Container spacing has been adjusted to the 15ft minimum required by the Fire Marshal. In addition to the generating station, offsite improvements include electric transmission infrastructure that connects to Texas-New Mexico Power facilities in the vicinity. No water or sewer will be needed for this development. Site drainage will be accomplished using an on-site collection system that outfalls into the adjacent drainage systems.
EXISTING SITE - The project site is part of the former ETC Texas City Trucking Terminal. The site has been determined to have certain environmental concerns affecting the groundwater. Specifically, a barium plume. Monitoring wells have been established and were monitored for a required amount of time. Applicant has indicated and provided documentation that the monitoring has been concluded and the wells have been or will be removed. The location of the monitoring wells have been indicated on the site plan. As part of an approved Response Plan, the property is subject to a deed restriction which limits its use to commercial/industrial use. A Revised Response Action Plan dated June 9, 2021, and prepared for the previous owner, Enterprise Logistic Services, LLC, to provide to TCEQ, represented expected future use to remain a trucking facility. A copy of the Revised Action Plan will be included in the agenda packet with this staff report.
ADJACENT PROPERTIES - The adjacent property to the north is Baker Distributing Company at 801 SH 146. The adjacent property to the south is burdened with an easement to TNMP for the location of transmission poles and wires. No survey has been provided, but the width of the easement when scaled with the Google Maps tool indicates a width of approximately 200ft. However, the existence of overhead power lines in close proximity to the location should be noted. Immediately south and adjacent to the TNMP easement is Golden Rule Logistics, another distribution entity. Golden Rule Logistics is a tenant on the property. Records show the property south of the proposed site to have common ownership, LM Storage, LLC, with the subject location. It is understood the project owner, Alpha Omega Power, LLC, will also be a tenant. The property is bounded on the west by the railroad. Gulf Coast Water Authority owns the vacant property which is immediately west of the railroad. The site is bounded on the east by S.H. 146. The TNMP substation is located immediately east of SH 146.
TNMP HEIGHTS SUBSTATION - The applicant's submission includes the following information regarding the location in proximity to the TNMP Heights Substation: The project location near the TNHeights substation was chosen based on detailed power flow analysis of the transmission system within TNMP service area. This analysis identified the TNHeights substation as an ideal candidate for a utility-scale BESS, providing sufficient injection capacity while remaining close to TNMP critical load centers. Injection capacity is a metric used to show how much electrical power (in MW) can be transmitted into a point of interconnection, such as a substation. The TNHeights substation has the highest injection capacity (over 800MW), making it the ideal point of interconnection for multiple BESS projects to support regional grid reliability and electricity demand. Currently, one BESS project is operational at the TNHeights substation (BRP Heights, 10MW project), while three others are in queue to interconnect (Zeya 256MW, IEP Blackhawk 100 MW, and Southern Select 100MW). The combined capacity of these four projects (466MW) is well below the available injection capacity of the substation, indicating the substation is capable of supporting multiple BESS projects.
BATTERY CHEMISTRY and MANUFACTURER - The application indicates an intent to use LFP (lithium iron phosphate) battery cells which is the cell chemistry which currently available information indicates may be less prone to thermal runaway than the NMO (nickel manganese cobalt) battery cells. Applicant has indicated Fluence or Tesla are likely manufacturers, and that they intend to use CATL cells. CATL cells are considered Tier 1 cells.
FLOOD PLAIN/COASTAL ENVIRONMENT - The site is not located in a flood plain. It is located inside the area protected by the Texas City Hurricane Levee. Container foundations will be placed at elevation 7.0ft in accordance with Texas City ordinances.
FIRE PROTECTION - Fire protection will be provided by on-site systems specifically designed for this application with Fire Marshal coordination. The project will be subject to the 2024 fire codes and building codes. The Fire Marshal may require additional submittals at the time of permitting and has advised these requirements will include at minimum commissioning and decommissioning plans, site safety plan, all UL test results for the batteries to be installed, a bond or other security for decommissioning and some requirements for insurance. The Chief Building Official is likely to require annual certification and inspection of ventilation systems at minimum. The Applicant acknowledges these, and other requirements must be satisfied to obtain the necessary permits.
DECOMMISSIONING - The costs of decommissioning have been identified as an issue of concern for cities because it is known that batteries have a service life which expires. Additionally, as technology evolves, installations become obsolete. A recent article from the Green Clean Solar, January 11, 2023, references some key findings from a study of the Electric Power Research Institute. The study estimated the cost of decommissioning for a 1-MWh NMC lithium-ion based grid energy storage system as $91,500. Applying this factor to the 410 MWH capacity proposed for this project would estimate the decommissioning cost as $37,515,000. Although this project is not proposing NMC lithium-ion batteries, the estimated decommissioning cost is based upon 40% dismantling and packaging, 30% transportation and only 30% recycling. The battery chemistry would have the most impact on the cost of recycling. The estimated cost is significant enough to warrant the posting of substantial security.
SECOND POINT OF ACCESS: The secondary access is proposed to be through adjacent property which is represented has have common ownership with the site being rezoned. Applicant provided a proposed access agreement with the adjoining property owner just before the Planning Board meeting. Staff have subsequently provided comments on the access easement and recommend the final location be dedicated by plat as a fire lane for secondary access to the site. Such platting is necessary to be sure the access can be maintained permanently through the adjacent property which is used for logistics and staging. Fire Marshal has indicated a requirement for lockbox access. THE APPLICANT HAS NOT AGREED TO PROVIDE THE ACCESS BY PLAT BUT IS MAINTAINING THE EASEMENT AGREEMENT AS SUFFICIENT.
APPLICANT'S EXPERIENCE/COMPANY HISTORY – The applicant is AOP Holdings, LLC d/b/a Alpha Omega Power, which was established in 2023. The company profile and resumes of the key personnel are attached to the staff memos.
RECOMMENDATION
At its regular meeting on July 22, 2024, the Planning Board voted 3-2 to approve the proposed Detailed Site Plan and to recommend approval of the zoning change to the Zoning Commission and to the City Commission.
At its regular meeting on August 6, 2024, the Zoning Commission held a public hearing. Notices of Public Hearing were mailed to eight (8) adjacent property owners before the hearing. One property owner appeared to ask questions about the proposed development but did not state an opposition to the request for rezoning or to the project. Following discussion and deliberation the Zoning Commission voted 4-1 to recommend the rezoning to the City Commission.
Fiscal Impact
Attachments
701 Hwy 146 N - ZC Staff Report
701 Hwy 146 N - Exhibits
701 Hwy 146 N - Legal Description
701 Hwy 146 N - PB Staff Report
07-22-2024 PB Meeting Minutes
701 Hwy 146 N - Alpha Omega Supplemental Submission 1
701 Hwy 146 N - Alpha Omega Supplemental Submission 2
701 Hwy 146 N - Access Easement Agmt with LM Storage LLC