The Town of Ulster in New York (NY) has received a request from local officials of the neighbouring town of Hurley to temporarily suspend the permitting process of a 250MW/1,000MWh BESS project under development by independent power producer (IPP) Terra-Gen.
As part of a letter addressed to the Town of Ulster, Hurley officials conveyed their “serious concerns” regarding the project and called for a six-month moratorium over its development.
“While we recognise there is a need for battery storage facilities, placing this facility in the middle of a residential area is irresponsible and an invitation for disaster,” explained Hurley officials in their letter.
Alcazar ESS into NYSERDA RFP
In the words of Terra-Gen, its Alcazar ESS project is “strategically located at one of the most important substations in the Hudson Valley and Ulster County.”
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If the project moves forward, it will form part of the New York Independent System Operator’s (NYISO’s) electricity grid via Central Hudson Gas & Electric’s (CHG&E) 400kV Hurley substation.
According to its construction application with the Town of Ulster, Terra-Gen intended to submit the project into the first round of the New York State Energy Research and Development Authority (NYSERDA’s) 3GW bulk energy storage RFP.
Launched towards the end of July, applicants had until September 4 to submit a proposal for the first 1GW procurement round. NYSERDA is expected to announce provisional contracts during the first quarter of 2026, ahead of full contract awarding during the following quarter.
Terra-Gen hopes to secure a NYISO interconnection agreement and commence construction of the project sometime during the final quarter of 2026, with commercial operations scheduled for 2028.
Town of Hurley’s concerns
Despite Terra-Gen’s Alcazar ESS being located within Ulster’s jurisdiction, Hurley officials have requested suspension of the project due to its close proximity to residential properties within their own jurisdiction.
“The proposed site is a narrow strip of land in the Town of Ulster, bordered by the Town of Hurley and City of Kingston,” explained officials.
According to their letter, the location for Alcazar ESS is surrounded by “a dense residential area and community areas,” including over 500 homes, two churches and three schools – all of which are located within a mile radius of the proposed facility.
As part of their primary concerns with the project, Hurley officials list “fire, explosion, and toxic chemical release” from the lithium-ion batteries which Terra-Gen intends to deploy.
Within their letter, officials also list the potential environmental impact to the surrounding area in the event of a fire, with a particular focus on damage to the Lower Esopus Watershed. The noise of the batteries, along with their resilience to flooding, tornadoes and earthquakes, were also mentioned.
In order to mitigate these impacts, Hurley officials are requesting the project be subject to full environmental review in line with the New York State Environmental Quality Review Act (SEQRA). Officials have also asked that the project adhere to the latest version of New York’s Energy Storage Safety Code, which was last updated on July 25 2025.
It’s worth noting that the project is already currently under SEQRA review, with the Town of Ulster acting as lead agency. Terra-Gen is also seeking approval of a special use permit from the Town of Ulster.
As part of its recent application, Terra-Gen also stated that its project would comply with the most up-to-date versions of the Fire Safety Code and the National Fire Protection Association (NFPA)’s standards for static energy storage deployment, known as NFPA 855.
Endorsement from State representatives
Despite the Town of Hurley’s concerns, the project received a ringing endorsement this month from Assembly member Sarahana Shrestha and Senator Michelle Hinchey, who represent both the town of Ulster and Hurley as part of their jurisdictions.
“It’s increasingly common for the fossil fuel industry to use isolated, unrelated incidents to evoke people’s worst fears about energy storage projects,” said Shrestha as part of a statement supporting development of the project.
“Terra-Gen has done a significant amount of due diligence, and I have confidence in our towns, local leaders, and NYSERDA to ensure that the best interests of our communities are always taken into account,” added Hinchey.
With many grass roots anti-BESS movements using the fire at Moss Landing as a reason to deny all energy storage projects, Hinchey dedicated a portion of her statement addressing why this is irrational.
“[Moss Landing] housed a large number of batteries in a warehouse-like repurposed turbine hall, creating a volatile environment for any small fire to spread very quickly,” said the Senator.
As other industry professionals have also pointed out, Moss Landing utilised outdated nickel manganese cobalt (NMC) lithium-ion batteries, as opposed to lithium iron phosphate (LFP) technology.
During a recent county-level presentation in Indiana, senior development manager at Aypa Power, Paul Gahman, described Moss Landing as a “blueprint for exactly how you do not want to construct a battery energy storage system.”
