California regulators propose new safety standards for battery facilities

The California Public Utilities Commission is proposing new safety standards for battery energy storage facilities and increased oversight of emergency response plans, while simultaneously launching an investigation into the Jan. 16 fire at Vistra's Moss Landing Battery Storage Facility.

The CPUC issued the proposal late Jan. 27 and is expected to vote on the item at its March 13 meeting.

"If approved, the proposal will enhance the safety of battery energy storage facilities, which play a crucial role in California's transition away from fossil fuels," the commission said in a statement.

Concurrently, CPUC staff has initiated its investigation of Vistra's battery energy storage facility in Moss Landing as a result of the incident on Jan. 16.

"The CPUC's Safety and Enforcement Division promptly began its investigation, requesting information and updates and maintaining communication with Vistra," the commission said. "On Jan. 22, SED staff conducted an initial site visit as a part of its ongoing investigation."

A fire at the 750-MW/3-GWh Moss Landing Battery Storage Facility consumed most of a 300-MW/1,200-MWh phase of the complex, including roughly 80% of the batteries and the building housing them. Moss Landing is one of the largest battery storage facilities in the world. The fire was the third and most severe failure at the battery project.

The CPUC's Jan. 27 proposal would implement Senate Bill 1383 to establish new standards for the maintenance and operation of battery energy storage facilities, and increase oversight over emergency response action plans for battery energy storage facilities. The proposal modifies General Order 167, which currently provides a method to implement and enforce maintenance and operation standards for electric generating facilities, according to the commission.

"The proposal also makes explicit that the CPUC requires battery storage facility owners to develop emergency response and emergency action plans, as required by SB 38," the commission said. "In addition, the proposal makes other technical updates to the standards to improve safety, reliability, and effectiveness of operation and maintenance activities, such as establishing technical logbook standards for battery storage systems, and expanding requirements for emergency plans that relate to all electric generating facilities."

No surprise: analyst

A proposal like this is a long time coming as people are increasingly concerned about battery energy storage system safety and there is not really one industry consensus on safety and how best to deal with accidents once they occur, said Annie Gutierrez, S&P Global Commodity Insights senior research analyst.

"Standardizing safety and emergency practices can be difficult especially in a more nascent market, but batteries in California have grown rapidly and are more established now," Gutierrez said. "California is the type of state that would take the lead on this sort of safety standard both because of its large battery fleet and political climate. It's likely that the recent fires put more pressure to get the proposal out, but safety has always been a topic."

The proposal is no surprise given the recent incident at Moss Landing, said Henrique Ribeiro, principal analyst of batteries and energy storage at Commodity Insights.

"The proposal addresses an important aspect of requiring the development of emergency response action plans," Ribeiro said. "However, this is insufficient if firefighters and other first respondents are not adequately trained and prepared according to these best practices. Mandating the reporting of malfunctioning, as well as the root cause of incidents, would also be critical to increase transparency, which would accelerate the development of more effective safety tools."

Changes to safety standards are needed as opposition from local communities against BESS has increased in many locations, and tends to be stronger in areas with a history of incidents, Ribeiro said. Arizona did not develop regulation for BESS after a well-publicized fire injured firefighters in 2019, while California was implementing measures to facilitate BESS permitting, he added.

"The proposal aims to reduce the opposition against BESS and prevent it to escalate such as the example of Arizona," Ribeiro said.

The NP15 BESS Net Revenue Index has averaged $4,640.53 per average BESS unit so far in January, a jump of 270% from the December average, according to data from Platts, which is part of S&P Global Commodity Insights. The BESS Net Revenue Index is the difference between the average a battery storage unit pays for charging and the amount it receives from discharging.

Battery storage growth

Since General Order 167 in 2004, the number of renewable electric generation facilities in California has increased significantly, mostly due to California's Renewables Portfolio Standard program, which was established in 2002, the commission said in the proposal. Likewise, battery storage system technologies and standards have also matured.

Statewide, battery storage capacity jumped from 500 MW in 2019 to over 13.3 GW in 2024, according to the commission. In 2024, the state brought more than 7 GW of clean energy capacity online - the largest amount in a single year in California's history, according to the commission. That included over 4 GW of new battery storage.

Utility-scale energy storage capacity reached 11,462 MW in 2024, accounting for 22% of California's peak demand. The state projects a need for 52 GW of battery storage capacity by 2045.

"Battery storage systems are one of the key technologies California relies on to enhance reliability and reduce dependency on polluting fossil fuel plants," the commission said. "Battery storage systems soak up clean energy in the daytime when the sun is shining, store that electricity, and then export it to the grid in the evening hours when the sun is down."