Appeals court hears dispute over Town of Bellinghamlease termination and access rights for ZP Battery project

Judge John Englander heard oral arguments in ZP Battery v. Town of Bellingham on whether the town properly terminated a ground lease after the permitting period and whether ZP Battery is entitled to a preliminary injunction restoring lease rights and access for a proposed battery energy storage facility.

The issue centers on whether documents captioned as "notices" or "notices of election to extend permitting period" modified the underlying ground lease so that ZP Batteryretained access and rights beyond the permitting period, or instead restricted access to the permitting period only. The parties also disputed whether ZP Batterycould finalize required surveys and permitting without an interconnection services agreement (ISA) from Eversource.

The question matters because the lease defines staged rights and payments across permitting, construction and operations periods. If the town validly terminated the lease after the permitting period, ZP Battery would lose site access and could forfeit long-term lease rights; if not, the townmay have wrongly ended the contract and an injunction could be appropriate.

"I'm gonna make a confession. I thought this case was easier than it is," Judge John Englander said at the start of argument, adding that once he read the filings he found the dispute more complicated.

Michelle, identified in the transcript as counsel for ZP Battery, told the court that ZP Battery "has a likelihood of success on the merits of this action because nothing in the party's ground lease imposes a requirement that all permitting for the battery energy storage project be completed during the permitting period." Michelle also said the project remains active with ongoing work on the Eversource interconnection and that ZP Battery had continued efforts—including a site walk and permit submissions—to secure approvals after the town's first termination notice.

Mister Holland, identified in the transcript as counsel for the Town of Bellingham, countered that the post-execution "notices" were executed by signatories authorized to bind the parties and that their language restricts access to the permitting (option) period. Holland emphasized that the town's termination letter said the lease was ended because the tenant had not permitted the facility within the permitting period.

Another attorney appearing in argument, identified in the record as Mister Michel, pressed that the notices' language and the surrounding record show inconsistency between the notice documents and the ground lease and that those inconsistencies weigh against granting a preliminary injunction. Michel argued that the notices could be read as amendments restricting access and that the plaintiff had not explained why the documents were captioned as they were yet seemingly changed lease rights.

A central factual and legal dispute discussed at length was the role of Eversource's interconnection process. Defense counsel argued the ISA is determinative of final facility size and that without an ISA ZP Battery could not provide the surveys the lease requires. Plaintiff counsel responded that preliminary technical reviews and survey work had been submitted and that the ISA process was underway, meaning the project was not moot.

The parties also debated lease provisions cited in the record: section 4 (definitions of permitting/option periods), section 5 (access and construction), section 5(b)(i) (requirements about surveying the final lease and easement areas during the permitting period), section 8 (operations-period rent formula measured per megawatt), and section 11 (permit-related cooperation). Both sides pointed to differing contractual language and to the parties' post-execution conduct as evidence supporting their positions.

Counsel for ZP Battery described steps the company took after the town's August 2023 notices: a November site walk with Eversource, permit application submissions that the town did not sign, and continued engagement with Eversource on cost and interconnection details. Counsel for the town said the documentation ZP Battery submitted to the town included draft plans that lacked a licensed surveyor's stamp and therefore did not meet the lease's survey requirement.

Judge Englander repeatedly characterized the record as inconsistent and fact-heavy. "There's a lot here that suggests to me that a trial is necessary to understand what the heck," he said, and he declined to resolve the preliminary-injunction request from the bench at the hearing. The judge said he would take the matter under advisement and issue a written decision after further review of the filings.

No injunction was granted at the hearing; the court did not issue an immediate ruling and will decide whether to enter preliminary relief or other remedies in a written opinion.

Notes: The argument referenced specific dates in filings and correspondence in the record: a purported termination notice dated in August 2023, a follow-up termination/confirmation letter dated June 3, 2024, and a complaint filed in November (year not specified in the transcript). The record also includes multiple appendices and affidavits cited by counsel (for example, the Forte affidavit and a proposed amendment to the ground lease).