CITY OF MENIFEE
SUBJECT: Community Benefit Agreement for the Double Butte Battery Energy Storage System
MEETING DATE: June 3, 2026
TO: Mayor and City Council
PREPARED BY: Ryan Fowler, Planning Manager
REVIEWED BY: Orlando Hernandez, Community Development Director APPROVED BY: Armando G. Villa, City Manager
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RECOMMENDED ACTION
1. Approve and authorize the City Manager to execute a Community Benefit Agreement for the Double Butte Battery Energy Storage System Project (Plot Plan No. PLN22-0154, Conditional Use Permit No. PLN22-0155, and Tentative Parcel Map No. PLN22-0283), located north of McLaughlin Road and a drainage channel, south of Matthews Road, east of San Jacinto Road, and west of Palomar Road.
DISCUSSION
Background
Development Code Amendment
On September 21, 2022, the City Council held a duly noticed public hearing concerning an Ordinance to approve Development Code Amendment (DCA) No. LR22-0130 relating to battery energy storage systems. One of the provisions of the DCA requires the City finds that the construction and operation of the facility will have an overall net positive economic benefit to the City. It further states that the Applicant must enter into a legally binding and enforceable agreement with, or that benefits, the City. The topics and specific terms of the agreement may vary, but may include funding.
Finance Committee
On March 16, 2026, the City Council Finance Committee reviewed the draft Community Benefit Agreement (CBA) for the Double Butte Battery Energy Storage System Project (Project) and was provided with the background and the summary findings of the fiscal impact analysis prepared for the Project. At this meeting the Committee recommended approval of the Community Benefit Agreement.
City of Menifee Staff Report
Double Butte BESS CBA
June 3, 2026
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Planning Commission
On April 22, 2026, the Planning Commission approved Plot Plan No. PLN22-0282, Conditional Use Permit No. PLN22-0281, and Tentative Parcel Map No. PLN22-0283. Approval of the Community Benefit Agreement is a condition of approval of the Project.
Project Description
Plot Plan (PP) No. PLN22-0282 proposes the construction and operation of a 500-Megawatt (MW) utility-scale (lithium-ion, flow or other technology) battery energy storage system on 27.3 net acres. This proposed facility will interconnect with the nearby Valley Substation that is owned and operated by Southern California Edison (SCE). The primary electrical equipment includes battery modules and power conversion equipment. The battery modules will be racked (akin to server racks) within hundreds of modular, external access-only containers that will connect to associated electrical equipment. Each container would be eight to ten feet tall and would be located within a metal framed outdoor-rated storage container with insulation and robust thermal management systems.
The Project would include a seven-foot wall along the Project boundary. The Project would include a permanent parking area for operations and maintenance workers (12 parking stalls).
According to the Applicant’s Project narrative, 12 permanent onsite workers are anticipated.
The interconnection to the SCE Valley Substation will include an overhead gen-tie line. The gen- tie line alignment would begin at the proposed onsite substation and extend approximately 1,500 feet to the east crossing over Case Road and will connect to the existing SCE Valley Substation.
Conditional Use Permit (CUP) No. PLN22-0281 proposes to allow for the utility-scale battery energy storage system use.
Tentative Parcel Map (TPM) No. PLN22-0283 (TPM 39522) proposes to consolidate seven parcels into one industrial parcel. The Project site is approximately 27.3 net acres.
Project Location
The Project is located on an approximately 27.3-net acre site located north of McLaughlin Road and a drainage channel, south of Matthews Road, east of San Jacinto Road, and west of Palomar Road (APN 331-190-014, -010, -017, -011, -047, -056, and -060). The current proposal includes two points of access off Palomar Road and an access off San Jacinto Road.
City of Menifee Staff Report
Double Butte BESS CBA
June 3, 2026
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3 7
IMAGE 1 – PROJECT LOCATION
STRATEGIC PLAN OBJECTIVE
Thriving Economy
FISCAL IMPACT
Fiscal Impact Analysis
A fiscal study was prepared to review the Project’s fiscal impacts. The study analyzed the Project’s fiscal impact (Scenario 1) and compared it to alternative uses for the site, including a general warehouse (Scenario 2) and a warehouse with a point-of-sale fulfillment center component (Scenario 3). The City’s fiscal impact analysis peer review consultant (SCG) concluded that overall Scenario 3 generates greater revenues to the City’s General Fund than the proposed Project.
The cumulative net positive impact of Scenario 1 over a 20-year analysis is approximately $23.8M with an average annual net positive of $1,190,836 compared to Scenario 3 of approximately $40M with an average annual net positive impact of $1,995,000.
Upon these findings, the City determined the Community Benefit Fee for the Double Butte Battery Energy Storage System Project to be $4,000,000 as a one-time cash payment to the City prior to the City’s issuance of building permits. This amount is approximately two times the average net annual impact of $1,995,000, which is consistent with the Community Benefit Fee previously determined with other battery energy storage system projects.
Road and Bridge Benefit District (RBBD)
In addition to standard conditions of approval for street improvements (i.e., Palomar Road frontage with extension to McLaughlin Road and San Jacinto Road frontage with extension to
City of Menifee Staff Report
Double Butte BESS CBA
June 3, 2026
3 3
3 7
McLaughlin Road), the Project will be required to participate in a future RBBD currently in the formation process. The RBBD is necessary to fund future infrastructure in the vicinity of the Project. It is anticipated the RBBD fee for this Project would not exceed $546,000 and would be paid from the Community Benefit Fee.
In addition to these one-time payments, the Developer agrees to purchase equipment for the Project such that the applicable use tax will be collected within the City, thus generating additional sales tax revenue for the City.
ATTACHMENTS
1. Community Benefit Agreement
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