Number 2 is correct. If you want a passive structure, try, "When that set point is reached/met/attained (by the device), then...." You cannot say "is occurred" but you can say "is attained/achieved/etc." Things simply occur/happen. They are not 'done' by something or somebody else. Helpful? I enjoyed thinking about the differences.

The second sentence is correct: "When that set point occurs, then that battery could be allowed to recharge." In the English language, the word "occur" is typically used to indicate something happening or taking place. In this context, "occurs" is the present tense form of the verb "occur," which is the appropriate form to describe an event or situation happening at a particular point in time. The second sentence uses the correct verb form ("occurs") to match the timing of the event with the set point.