Controversial Battery Storage Project Sparks Safety Concerns in California

In early 2023, Compass Energy Storage LLC initiated plans to construct a 250-megawatt (MW) Battery Energy Storage System (BESS) facility in the northern portion of San Juan Capistrano. This proposed facility is designed to utilize lithium-iron phosphate battery systems to store and discharge energy to the electrical grid. Its strategic, yet controversial, location places it adjacent to Interstate 5, the LOSSAN/Amtrak rail corridor, and Oso Creek. Significantly, it is also less than 1,500 feet from residential neighborhoods in Laguna Niguel.

The project's path has been anything but smooth. Following the City of San Juan Capistrano's rejection of a zoning amendment related to the project, the applicant chose to bypass local review. Instead, Compass Energy Storage LLC opted to seek approval directly through the California Energy Commission’s (CEC) Opt-In Certification Program. On April 30, 2025, the CEC deemed the application complete, a move that initiated a state-level review process excluding municipal discretionary oversight. The first public hearing on the project was held on May 28, 2025.

However, the proposed BESS facility has ignited significant public safety, public health, environmental, and economic concerns across Orange County. This type of facility, utilizing lithium-iron batteries, is described as "incredibly dangerous when they overheat, causing the batteries to catch fire".

Well-documented risks associated with such facilities have already materialized in California. For example, a battery fire at the Moss Landing Power Plant in Monterey County in January 2025 led to the release of toxic gases, widespread evacuations, and transportation disruptions. Similar incidents have also been reported in San Diego County and other regions.

Local officials and communities are particularly concerned about the specific threats posed by the Compass project's location:

• Wildfire Risks: The proposed site is surrounded by vegetation and steep terrain, and is in close proximity to a State-designated “High Fire Hazard Severity Zone”. It is also near homes and schools. A fire here could easily lead to the widespread destruction of homes.
• Public Health: Lithium batteries are known to emit toxic gases within seconds of igniting, posing significant air pollution and public health risks. First responders would be exposed to hazardous, toxic gases if they attempt to quickly extinguish a fire, potentially causing severe, debilitating health impacts. If the fire is not readily extinguished, these toxic gases would generate a public health risk for the surrounding communities.
• Environmental Concerns:
  • Water Contamination: The project’s proximity to the Oso and Arroyo Creek waterbeds raises serious concerns about water quality. Any water or fire extinguishing compounds used to combat a fire could become easily contaminated with heavy metals and absorbed into the region’s soil, adversely impacting the local ecosystem. This contamination would directly impact the San Juan Creek Watershed, which flows to the Pacific Ocean just miles away.
  • Erosion: The project site is immediately adjacent to an unimproved area of Oso Creek that is experiencing high velocity/volume flows near an active Railroad.
• Economic Impacts: A fire at the proposed site would likely lead to the closure of both the railroad and the Interstate-5 corridor. Even a temporary closure of these critical transportation routes would severely impact the Orange County economy. The project's proximity to critical infrastructure and constrained emergency access points exacerbate these concerns.

In response to these substantial risks, the City of San Juan Capistrano formally adopted a resolution of opposition on June 3, 2025. Other jurisdictions, including the Orange County Board of Supervisors, have implemented a moratorium on new BESS projects in unincorporated areas, with Escondido and Solano County taking similar actions. The California Legislature has also acknowledged these concerns by introducing and adopting new safety legislation (e.g., SB 38, SB 1152, AB 303, AB 434, SB 283) to establish siting restrictions and fire safety protocols.

On July 8, 2025, the City of Laguna Hills City Council addressed the issue. Recognizing the potential regional impacts and the precedent this project may set for future development near residential communities, the City Council voted to authorize Mayor Joshua Sweeny to sign and submit a formal letter of opposition to the CEC. The letter clearly outlines concerns related to fire risk, public health, environmental degradation, transportation disruptions, and the erosion of local control. As stated by Mayor Sweeny, "The health and safety of California residents should always take precedence over any potential benefits proposed by this project".

The fate of the Compass BESS project now rests with the California Energy Commission, as local communities continue to urge them to prioritize public well-being throughout the review process.