Will Morro Bay Power Plant sell soon?

February 25, 2015

Energy firm Dynegy announced Tuesday that it did not succeed in a search for a buyer for the Morro Bay Power Plant, but the company likely faces pressure to eventually unload the closed facility. [Tribune]

A Dynegy spokesman said the Morro Bay Power Plant property had been on the market since late last year. Dynegy was also trying to sell its California energy facilities in Oakland and Moss Landing in Monterey County, but the bids submitted for the three properties came in below expectations.

Dynegy closed the Morro Bay plant in early 2014 after it announced the facility was no longer profitable. To keep the plant running, the company would have needed to invest heavily in making the facility compatible with California environmental regulations.

While Dynegy may not be in a rush to sell the plant, it must unload the property by 2033 or the city of Morro Bay could snatch it at the cost of $1. A clause in the current power plant deed allows the city to do so if the facility goes 20 years without generating electricity, City Manager David Buckingham and City Attorney Joseph Pannone said.

The Morro Bay City Council discussed a potential sale of the property at its meeting Tuesday night. A majority of the council favored reaching out to potential buyers and using its rezoning powers to make the property more desirable

Councilman John Headding said his research indicates that Dynegy does want to get rid of its California properties. They want to sell the facilities due to the state’s strong environmental standards and the lack of profitability at the sites, he said.

Headding suggested that conservation organizations with access to millions of dollars should create a preserve at the power plant location. The preserve could work in conjunction with a development on the property, he said.

Councilman Noah Smukler said the city should contact Washington, D.C. legislators to see what kind of use they suggest for the site. Smukler also said the nonprofit Pacific Wildlife Care Center should be allowed to continue rehabilitating non-marine animals at the location.