New Morro Bay City Council Could Close Morro Bay Power Plant
The new Morro Bay City Council majority — mayor Jamie Irons and council members Christine Johnson and Noah Smukler, elected on at the June 5 primary — may wind up deciding the fate of the 60-year-old Morro Bay Power Plant, whose outfall lease with the city to operate the plant was scheduled to expire on Thursday, November 15.
The current 13-year lease allows Dynegy, owner of the plant, one of the oldest on the California coast, to draw water from the Morro Bay National Estuary, use it for cooling the plant, and then discharge it into Estero Bay at Morro Rock.
The Council action could take place at its first official business meeting on December 11, but It is not scheduled at the December meeting at this time, Morro Bay city attorney Rob Schultz said.
The expiring 13-year lease has a provision allowing an extension, he said. According to Schultz, "Negotiations between the city and Dynegy are ongoing, so it can't really be predicted what will or won't happen." "They could reach a deal tomorrow or not. If Council were to not consent to (an extension), the City would give 30 days to vacate. If Dynegy did not vacate in the 30 days, then litigation would begin. To get an eviction notice from the court could take awhile, depending if Dynegy fought eviction."
But the outfall lease has a holdover clause that would allow Dynegy to continue to possess and operate the plant property under a subsequent month-to-month lease. (The current lease is for the outfall and not for operation of the plant property.) It is not a subsequent lease but just a continuance of the lease from month to month on the same terms and conditions as the expired lease.
The city and Dynegy have been in negotiations to extend the lease but no agreement has been reached. Dynegy has requested to continue the lease from month to month after the regular lease expires on November 15.
But it will be up to the new Morro Bay City Council to decide on whether to grant the request. The new Council majority are scheduled to be sworn into their offices on December 9 and to begin serving on December 11. How Irons would vote is unclear. Whether he is able to vote on the issue is unclear because of a possible conflict of interest — he works at the power plant as an engineer. Also, during the June 5 campaign he stated he would recuse himself from all votes related to the plant if elected.
If the lease extension is approved, "the new Council will decide whether to allow the month-the-month tenancy or decide whether to give Dynegy a 30-day notice to vacate the premises," Schultz said.
The plant has been a big source of income for the city. Under the current outfall lease, it has paid Morro Bay an estimated $750,000 per year. Over the years, the city has earned many millions from the lease and franchise fees.
But the plant has also killed many sea creatures in the estuary, threatening the health and well-being of that body of water, which the community and surrounding areas depend on for their economic stability.
A history and recent developments with the plant start at Slo Coast Journal / November 2009 and extend to Slo Coast Journal / June 2012 with many articles in between.
The plant with its three 450-foot smoke stacks has been an historic marker in the city for six decades.
