KATY, Texas – A state ruling on the 500-megawatt battery storage facility proposed inside Katy city limits has been delayed, and filings show that ERCOT says it has a direct interest in the outcome.
The project, rejected by Katy City Council after months of homeowner opposition, is now tied up in a regulatory battle before the Public Utility Commission. Ochoa Energy Storage LLC, the developer, is asking the PUC to overturn the city’s denial and declare its zoning decisions invalid.
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Katy Mayor William “Dusty” Thiele confirmed that the state has not made any decision.
“There has been no ruling by the PUC at this time. We anticipate PUC proceedings and a ruling in mid-2026,” Thiele told KPRC 2’s Reporter Rilwan Balogun in an email.
The PUC is working on a procedural schedule that will guide how and when the case moves forward. The project effectively remains on hold until that schedule is approved.
A spokesperson for the Public Utilities Commission said the next major step will be selecting a timeline for testimony, discovery, and hearings.
“While this procedural schedule has not yet been approved or denied by the Commission, it can give you a sense of one of the proposed timelines being considered for this proceeding,” said the PUC chief press officer. “The Commission is expected to consider what the procedural schedule for this case will be at an upcoming open meeting. Our next open meeting is Dec. 12.”
The agency says any new decisions will appear in the project’s public docket but stressed no greenlight has been given to the developer.
Filings from Ochoa Energy Storage outline a lengthy legal timetable stretching from March through July 2026. It includes:
- March 6, 2026: Ochoa’s direct testimony
- April 13, 2026: Katy’s direct testimony
- May 1, 2026: ERCOT and PUC staff testimony
- July 15–16, 2026: Hearing on the merits
The PUC’s ruling would come sometime after the July hearing.
ERCOT filed a formal motion to intervene, arguing Katy’s decision touches on statewide grid issues and ERCOT’s legal mandate.
The developer’s appeal hinges on the argument that local zoning cannot block grid infrastructure. ERCOT says this raises fundamental questions about its role under Texas law.
ERCOT wrote:
- Ochoa’s appeal “raises questions about the extent of ERCOT’s authority”
- The city’s denial implicates “ERCOT’s exclusive jurisdiction to regulate grid access, reliability, and adequacy under PURA § 39.151”
- The outcome could “adversely affect” ERCOT’s interests
ERCOT asks to be admitted as a full party in the case.
In November, this dispute was still largely a local fight.
Ochoa Energy Storage sought a special use permit for a 24-acre site in Katy, where it planned to build a 500-MW battery energy storage facility. Battery energy storage sites charge and release electricity to support the grid, particularly during high-demand or emergency conditions.
Katy homeowners strongly opposed the project, raising concerns about fire hazards, safety, and proximity to neighborhoods. The city held multiple public hearings before ultimately voting to deny the permit.
City leaders maintain that they:
- Conducted multiple reviews
- Attempted to work with the developer
- Applied neutral safety ordinances to all such projects
- Used long-standing zoning authority to protect residents
Those ordinances require hazard mitigation, emergency planning, fire suppression systems, and substantial setbacks.
After the denial, Ochoa appealed to the PUC, arguing the city had no authority to block a grid-connected battery facility.
The company claims Katy’s decision:
- Interferes with ERCOT’s grid management
- Conflicts with state jurisdiction over energy storage
- Blocks a needed CenterPoint substation
- Is based on “vague and unfounded” safety concerns
The company has asked the PUC to declare Katy’s ordinances and vote “null and void.”
Ochoa’s parent company, Vesper Energy, insisted it tried to resolve the issues locally.
“We have worked diligently and respectfully with the Katy community to meet local needs and provide stability to the Texas energy grid,” said Vesper Energy to KPRC 2 News in November. “Only after exhausting all reasonable local pathways did, we proceed to the PUC.”
What happens next
The PUC will take up the procedural schedule at its Dec. 12 open meeting. Until a schedule is adopted, the project is stalled.
If the PUC ultimately rules in Ochoa’s favor, Katy could be forced to allow the project despite city council opposition and resident objections. If the city prevails, it could set a major precedent for local control over energy storage sites.
For now, the fight between Katy, the developer, and now ERCOT will continue well into 2026.