Plans afoot to shutter (finally) Morro Bay’s skyline-busting power plant

October 15, 2008

By DANIEL BLACKBURN

Officials at the Morro Bay Power Plant are planning to bring down the curtain on the 54-year-old facility and currently are telling city council members that “continued operation of the plant is unlikely” beyond 2015.

Plant owner Dynegy’s representative Randy Hickok made the pronouncement in a Sept. 9 letter to the council, a copy of which was obtained by CalCoastNews. Hickok suggested the existing plant could even be shut down within three years, and blamed tough water quality rules proposed by the state for minimizing the prospect of new plant construction. The council will discuss Dynegy’s most recent plans later this month in a session closed to the public.

Morro Bay City Attorney Rob Schultz said Wednesday that “unless there is some dramatic change in the proposed state rules, “they [the plant] probably can’t survive after the 2015 date.”

Noting that “energy lobbyists are working hard” for some of those changes, Schultz said Dynegy “has left some wriggle room” in their plans.

Nevertheless, if the Texas energy company cannot sign a contract to sell electrical power generated by the plant after 2011, or if city officials remain uncooperative about renewing an outfall lease, “the plant will be retired,” Hickok wrote.

The electrical plant has long been a political flashpoint in the beachfront city, its three 450-foot-tall smokestacks almost as recognizable as Morro Rock. Apart from community opposition because of its incongruous oceanfront location, the plant has proven problematic to its owners by continually running afoul of state water quality regulators for discharge. And its generators and pumps, which use water from the Morro Bay National Estuary, have been identified as the cause of wholesale destruction of marine life in the waterway. The plant’s production gradually has been greatly reduced, operating at only six percent of capacity the past two years, with extremely limited operation during summer spawning months.

Regulators with the State Water Resources Control Board, following a 2007 federal appellate court ruling, are developing a new policy restricting the often-destructive method of “once-through cooling” (OTC). This outdated methodology draws a steady flow of intake water to cool plant generators, and which is then released, super-heated, back into the ocean. The impact on the local estuary has been significant.

Dynegy official Hickok informed the council the proposed new state policy “would likely have a materially adverse impact to any continued usefulness of (the) Morro Bay (plant).” Hickok cited a virtual ban on “the use of sea water for once-through cooling of power plants” in California, and noted the city’s ongoing opposition to alternative cooling methods proposed by Dynegy officials.

The state’s policy, if eventually adopted, would require “all new and expanded coastal power plants using sea water for cooling” to use “the best technology to minimize the intake and mortality of all forms of marine life.”

Even if Dynegy officials decided to change the plant’s cooling technology to comply with state mandates, they would still have problems with Morro Bay officials.

A “closed-cycle cooling” system, working much like a common radiator by reusing its water in containment, would be required for renovation or modernization of the plant. Without such a system, the plant cannot continue to function. Dynegy’s Hickok acknowledged that city officials long have opposed closed-cycle cooling because of detrimental visual impacts of tall cooling units and noisy operation.

Schultz, the city’s attorney, said Morro Bay officials “absolutely” will continue their opposition to such a system in a new plant.

However, he added, “We’ve seen absolutely no inclination on their part [Dynegy] to build a new plant.”

Adding extra weight to problems facing a new plant proposal is the current economic climate, which could deter private investors for years to come. Without signed contracts for delivery of stable sources of electrical energy, those investors would be reluctant to commit.

Critics of the plant contend that no closed-cycle design yet developed provides adequate protection for the estuary, or for a resulting diminishing of air quality.

Jack McCurdy, co-chair of the non-profit Coastal Alliance on Plant Expansion (CAPE), hailed the Dynegy owners’ statement.

“We consider this to be a victory in CAPE’s long fight to make certain that if a new or re-powered Morro Bay plant were built, adequate protections would be ensured. No proposed designs of such a plant have met those standards,” McCurdy said. McCurdy is a retired Los Angeles Times reporter and Pulitzer Prize recipient.

An initial study by staff of the California Energy Commission in 2005 showed that California’s 21 coastal power plants using “once-through cooling are contributing to declining fisheries and the degradation of estuaries, bay and coastal waters (by killing) billions of aquatic organisms, including fishes, fish larvae and eggs, crustaceans, shellfish and many other forms of aquatic life from California waters each year.”

Also, a study funded by the plant’s previous owner, Duke Energy, showed that a new facility would destroy between 16 percent and 33 percent of the fish and crab larvae in Morro Bay each and every year.

Morro Bay residents are planning the site’s use if and when it should become available. The so-called “Futures Group” appointed by the city council has recommended a thorough examination of alternative uses, including the possible establishment of a redevelopment agency. Other uses which have been proposed include a marine museum, an arts center, and restored natural habitat for public use.