Power plant closure costing Morro Bay, APCD
November 15, 2013
The city of Morro Bay and the San Luis Obispo County Air Pollution Control District will lose more than $1 million in combined annual income upon the closure of the Morro Bay Power Plant. [Tribune]
Officials with energy company Dynegy, which owns the plant, announced last week that it plans to close the natural gas-fired plant in February.
Dynegy pays Morro Bay more than $800,000 annually in outfall lease fees. The air district receives more than $270,000 annually from the plant in air pollution fees.
“We’ve been preparing for this for quite some time,” Air Pollution Control Officer Larry Allen said.
The city has been collecting outfall lease fees from the plant since it incorporated and assumed control of the lease in 1984. The plant pays for the environmental impact of bringing in and discharging ocean water as part of its cooling process.
In recent years, Morro Bay has placed much of the revenue from the outfall lease fees in its reserve fund to cushion the blow of the potential plant closure. Previously, outfall lease fees went to the general fund.
The city plans to make up for the lost funds through use of reserves, cost savings and possibly new revenue sources, outgoing City Manager Andrea Lueker said.