CITY OF COMMERCE
AGENDA REPORT
TO: Honorable City Council
FROM: City Manager
SUBJECT: Approval of Amended License Agreement with Commerce Energy Storage, LLC for 6904 and 6920 East Slauson Battery Storage Development MEETING DATE: August 26, 2025
RECOMMENDATION:
The City Council will consider adopting a Resolution approving an Amended and Restated License Agreement for Transmission Lines with Commerce Energy Storage, LLC (CES) for the installation of high-voltage electric transmission lines along South Garfield Avenue and up to the Southern California Edison (SCE) Laguna Bell Substation at Garfield Avenue and East Gage Avenue.
BACKGROUND:
On June 28, 2022, the City Council approved a License Agreement with CES to allow for the installation of high-voltage electric transmission lines within the City of Commerce, along South Garfield Avenue and up to the SCE Laguna Bell Substation at Garfield Avenue and East Gage Avenue. The Council also approved an Agreement for Sale of Real Property between the City and CES for the acquisition of land located at 5960 Garfield Avenue (APN# 6356-017-900), a remnant, landlocked parcel determined to have no ongoing utility or productive City use.
The approved project supports CES’s development of a utility-scale battery energy storage system (BESS) facility at 6904 and 6920 East Slauson Avenue. This facility is designed to store electricity from the existing high-voltage SCE grid during periods of excess supply and discharge it back to the grid during peak demand. The facility is remotely operated and minimally impacts City services.
ANALYSIS
An amended License Agreement was required to accommodate an additional 300 feet of transmission line along Garfield Avenue to provide access to the substation. The proposed 2024 Amended and Restated License Agreement (copy attached) expands the scope of the project while strengthening City protections and increasing compensation. Key updates include:
The licensed underground transmission corridor along Garfield Avenue increases from approximately 1,800 linear feet to 2,100 linear feet.
The Annual License Fee increases from $35,000 to $42,000, subject to annual CPI adjustments, while the previously approved one-time lump sum fee of $250,000 (which CES already paid for the initial term) remains unchanged.
CES is required to grind and restore pavement along Garfield Avenue after completion of transmission line construction.
Overall, the amended agreement enhances City protections, expands project obligations, and secures additional compensation while ensuring the safe installation of critical energy infrastructure.
Adopting the attached Resolution approving the Amended and Restated License Agreement will allow CES to proceed with the expanded project scope, while providing greater long-term safeguards and financial benefits to the City of Commerce.
FISCAL IMPACT:
Adoption of this agreement will generate a total of $42,000 (plus CPI adjustments) in recurring annual revenue (an increase of $7,000 annually) for the City, paid by CES under the terms of the agreement.
ALTERNATIVES:
Approve staff recommendation
Disapprove staff recommendation
Provide further direction to staff
RELATIONSHIP TO STRATEGIC GOALS:
This agenda item relates to the 2016 Strategic Plan, Infrastructure and Facilities Guiding Principle 4:
Develop and invest in infrastructure and beautification projects that support economic growth.
Approved and Recommended by: Shahid Abbas, Director of Public Works Fiscal Impact reviewed by: Alvaro Castellon, Director of Finance Approved as to form by: Noel Tapia, City Attorney
Respectfully submitted: Ernie Hernandez, City Manager ATTACHMENTS:
Resolution