Image: Santa Barbara
Tesla Megapack batteries were delivered on March 16 to the Cater Water Treatment Plant in Santa Barbara, California.
The battery systems, funded by SCE’s Self Generation Incentive Program, will provide power backup to the plant, a critical city facility, while also managing demand on the electricity grid. This development aligns with the city’s adopted Strategic Energy Plan, which emphasizes ensuring power availability for critical facilities during outages and emergencies.
“Megapack is a powerful battery that provides energy storage and support, helping to stabilize the grid and prevent outages. By strengthening our sustainable energy infrastructure, we can create a cleaner grid that protects our communities and the environment,” explains the Tesla website.
As reported by The Independent last month, the Santa Barbara City Council updated the terms of a two-part contract with Tesla for the renewable energy system at the Cater Water Treatment Plant. The new agreement allocated 10% of a combined million-dollar tax credit to the city and the remaining 90% to Tesla to cover increased project costs.
Initially signed in January 2021, the purchase agreement with Tesla involved installing two battery energy storage systems to supply backup power to the plant’s two largest pump stations. The original $3.2 million project cost was subsidized by the California Public Utilities Commission’s Self-Generation Incentive Program, allowing the city to pay Tesla the full amount and potentially save an estimated $790,000 over the 20-year life of the batteries.
Since the original agreement, several factors have impacted project costs, including the pandemic, supply shortages, and the recently passed Inflation Reduction Act, which made the city eligible for an additional million-dollar Investment Tax Credit. With increased costs and the ability to fully subsidize the project with combined state and federal tax incentives, the city renegotiated the contracts, assigning 90% of the $1,004,785 investment tax credit to Tesla while retaining the remaining 10%.
The city will not allocate the extra revenue in the annual budget until the federal tax credit is officially approved, and the battery storage system is completed and operational, which is unlikely to happen in fiscal year 2023.
