Although located in neighbouring Nevada, the project will connect to the California Independent System Operator’s (CAISO) electricity grid via transmission infrastructure owned by transmission-only utility GridLiance West.
GridLiance West is one of a handful of businesses owned ultimately by NextEra Energy, Inc., which owns NEER along with Florida’s largest utility Florida Power & Light (FPL). As recently uncovered by Energy-Storage.news, the Floridian utility intends to bolster its portfolio with plans to spend over US$3.8 billion on new BESS between 2026 and 2027.
NEER project originally due to come online this year
The amendments in question relate to a battery storage services agreement executed in 2023 associated with offtake from a portion of NEER’s Yellow Pine Solar III project, which forms part of the developer’s wider Yellow Pine complex.
Under the terms of the original agreement, commencing June 1 2025, SJCE were entitled to purchase resource adequacy and battery tolling rights from NEER’s Yellow Pine III project for a period of 20 years. For this service, SJCE would pay NEER a maximum annual fee of US$3.87 million, not exceeding US$77.4 million across the contract term.
However, on April 21 last year, NEER informed SJCE that it wouldn’t be able to deliver the project on-time due to delays in completion of the upstream Lugo-Victorville 500kV transmission line upgrade.
At the point of original contract execution, the transmission line upgrade, a project jointly owned by utilities Southern California Edison (SCE) and Los Angeles Department of Water and Power (LADWP), was expected to be operational by June 2025. However, this has now been delayed until December 31, 2027.
Faced with regulatory procurement deadlines and the unlikelihood of finding a better alternative, SJCE chose to renegotiate with NEER instead of terminating the agreement and pursuing damages.
According to meeting documentation produced by SJCE, delays to the transmission line will not only affect NEER’s Yellow Pine III development, but also a further 12 projects connecting to the CAISO-controlled grid.
Both NEER and SJCE have alerted the Office of California Governor Gavin Newsom, CAISO and the California Public Utilities Commission (CPUC) on the importance of the upgrade’s timely completion.
Lower unit price with an option to increase volume at later date
Under the terms of the new arrangement, SJCE will have tolling energy-only rights to the battery commencing June 1, 2027 at a marginally lower maximum annual rate of US$3.756 million, not exceeding US$78.675 million across the contract term.
SJCE’s resource adequacy obligations from the BESS are set to commence on June 1, 2028, however, in the event of further transmission delays, the CCA’s energy-only rights will continue for up to a further three years, if required.
As an added bonus to SJCE, if NEER is able to increase the capacity of the BESS at Yellow Pine III, the contract will be increased without the need to renegotiate. In the event of this occurring, SJCE would pay NEER a maximum annual fee for the greater volume of US$5.259 million, not exceeding US$110.157 million across the contract.
Although megawatt numbers weren’t specified, SJCE stated that NEER “may have the ability to increase volume [of the BESS] by 40%”.
SJCE focuses on the safety of energy storage following “catastrophic” incident
As described by staff at SJCE’s energy department, the recent “catastrophic” fire at Vistra’s Moss Landing facility has led to “widespread scrutiny of lithium chemical battery technology, configuration, and safety standards.”
Unlike in the original agreement with NEER and in an attempt to alleviate fears around BESS fires, staff at SJCE dedicated an entire section to the safety of energy storage facilities within its recent meeting documentation. Staff pointed to advancements in safety measures now deployed at storage facilities, which include fire prevention systems, fire-resistant barriers and modern ventilation systems.
In order for the Yellow Pine III BESS to be cleared for commercial operations, NEER would need to demonstrate that it had complied with modern safety standards established by local, state and federal agencies.
Within its annual 10-K 2024 report, filed with the US Securities and Exchange Commission (SEC) on February 28, 2025, Vistra said that it expected to write off the remaining book value of the impacted 300MW Moss Landing facility, valued at around US$400 million.
Although Vistra expects to recover a portion of the direct losses incurred from the event through property and business interruption insurance, it noted that it had since been hit with two lawsuits filed with California’s state court.
As with the entirety of the energy storage industry, staff at SJCE said it would continue to monitor safety proceedings relating to the incident at Moss Landing.
Further renegotiation for offtake agreement from Yellow Pine III
Although meeting documentation didn’t mention the size of Yellow Pine Solar III, NEER has secured a CAISO interconnection agreement for the third portion of its Yellow Pine complex, covering 250MW of both solar and storage.
Along with the SJCE contract, NEER has negotiated agreements for offtake from its Yellow Pine III project with two other California CCAs: Silicon Valley Clean Energy (SVCE) and San Diego Community Power (SDCP).
The larger of the two agreements is held with SVCE who has contracted with NEER for 115MW/460MWh of battery storage capacity. The agreement with SDCP covers 35MW of solar generation along with 35MW/140MWh of storage capacity.