The Morro Bay Power Plant: Past, Present and Future
by Jack McCurdy
Part One
After living with the Morro Bay Power Plant and its three looming, landmark, 450-foot tall smokestacks for almost half a century, many Morro Bay residents welcomed the announcement in late 1998 by Duke Energy, the new owner, that the old plant would be modified with two new, more efficient, smaller and cleaner natural gas-burning units, and one stack would be replaced with two much smaller ones.
But within two years, that plan paled in significance to the project Duke settled on and pursued: a $600 million replacement of the entire existing plant, including all the stacks, with an even smaller and cleaner facility featuring four 145-foot stacks, and its operations would produce a guaranteed $2 million a year in revenue to the city. It seemed like a dream come true for everyone.
More than anything, at that time, most people were looking forward to an end to the syrupy residue that the smokestacks had been dropping on Morro Bay patios, window sills, and automobiles - cars that PG&E, the power plant's owner then, had been having re-painted in large numbers to remove discolorations from the grimy fallout. The residue from the stacks' emissions was commonly known as "crud." It resulted from the oil that the plant had begun burning sporadically in the 1990s to operate its generators when supplies of natural gas ran low.
Replacing those ugly stacks with a lower-profile plant - it sounded so good. And Duke's pervasive public relations campaign that followed made it even more so. Duke's huge display ads in the Tribune contrasted pictures of the smokestacks dominating the Embarcadero area, matched against artistic scenes of the same area containing an almost toy-like proposed plant obscured in the background.
But as the debate over a new plant spread through the community, few remained focused on getting rid of stacks because of their appearance and for being so incongruous with the beautiful bay.
In part, that was because the town was awakened to a much more important reality in the spring of 1999 when four professional nurses who lived in Morro Bay called a meeting of residents in the Community Center to warn that even if Duke Energy operated the plant only with natural gas, even if the volume of those gas fumes were reduced, and even if that volume was found to be less than that of the old plant, emissions from the smokestacks would still be dangerous to breathe, especially by children and seniors.
It was stunning news to many of us in the audience. Duke officials were at the meeting, and their smiling faces and reassurances about how wonderful the new plant would be for everyone sought to assuage the small crowd. But the nurses - with their training in the effects of airborne chemicals on humans - were dead serious. No smiling faces on them. And they were convincing - at least that there might be another side to Duke's rosy picture.
Four of us, including one of those nurses, decided to look deeper. We met over the kitchen table in Ellen Sturtz's rented house that summer to discuss what to do. We agreed there were too many unanswered questions about the effects of the plant on our town to stand silent. So we - Sturtz, nurse Pam Boyle-Underhall, Betty Winholtz (a future and current Morro Bay City Council member), and myself - agreed to form the Coastal Alliance on Plant Expansion (CAPE), which is observing its 10th anniversary this year. Those have been 10 long, tough years, full of hard work, never-ending surprises, investigations and research by our own able members, organizing, trying to keep residents informed, fundraising, travel, seeking and finding legal advisers and biological experts, internal strife, and contending with Duke, its money and its fervent supporters, including most members of the City Council over the years.
Soon after the nurses' meeting, as details of Duke's plans dribbled out, it surfaced that the modified plant would draw water from the bay, designated the Morro Bay National Estuary, for cooling its generators, just like the existing one. A few residents were aware that tiny fish and other aquatic life are in the water taken into the plant and die in the process. But no one had any idea how many were destroyed because no studies had been conducted. Then in early 2000, media reports about new research on the health effects of industrial facilities, including power plants, began to appear. The next year, two Morro Bay residents, both attorneys, produced lengthy reports on a large number of studies showing the danger of breathing a component of emissions called particulate matter.
How the proposed new $600 million plant would affect the Estuary and the health risks that residents would face from its emissions became the two central questions that various state agencies deliberated on at great length and that were hotly-debated in the community over the next four years.
Now 10 years after CAPE took form, the bottom line is no new plant has been built and, based on the best information available, it is pretty certain that none will be. Duke sold the plant and left the state almost four years ago, leaving its applications for the project with state agencies hanging. Actually Duke's particular project is all but dead because so much has changed on the legal, regulatory, and technological front since Duke bailed. It means Dynegy, the present plant owner, would be forced to start all over with virtually no prospect of winning regulatory approval of a plant design that is now obsolete and legally forbidden. Other owners - PG&E is one of them - are building replacement plants elsewhere with the exact technologies, which do not use sea water for cooling, that CAPE, other organizations across the nation and other California state agencies have been advocating for many years.
On one hand, failure to build a new plant cost the city a guaranteed $2 million a year in revenue for the life of a new plant--perhaps 50 years. On the other, people won't be exposed to life-threatening emissions and the estuary's aquatic life won't be ravaged, which has continually put the estuary's very existence in jeopardy. An estuary on the East Coast whose waters were being used by a power plant saw its marine life collapse. If that were to happen here, the economic consequences for our property values and businesses would make $2 million a year seem like loose change.
In the aftermath of Duke leaving, Dynegy has told the City Council that it would likely close the existing plant - with two of its generating units already mothballed now and the other two barely operating at all - in 2015, although exactly when or whether that will actually happen is still somewhat uncertain. But it could even be sooner than 2015. It depends mainly on new regulations being formulated by the state water board on restrictions of estuary, bay, and ocean water for cooling power plants along the California coast. This includes the Morro Bay plant, which has drawn immense amounts of water from the bay (officially the Morro Bay National Estuary) for cooling, as would the proposed replacement. And it also depends on possible litigation if the board fails to end that cooling process as required by a landmark federal court decision two years ago.
Although continued use of Estuary water by the existing plant remains a significant concern, part of the focus now is on what to do with the old plant, sitting on 107 picturesque acres bordering the north shore of the Estuary - what do we want to replace it with. That will be the community's decision - pure and simple, perhaps at the ballot box. Lots of ideas on alternative uses of the plant site have sprouted up over the past five years, including, most recently, a massive renewable energy research university. But nothing concrete has been proposed yet.
Morro Bay's future without a plant holds great promise for the community and the opportunity to see the plant site developed in a way that would compliment the community, not degrade it.
That bright side is in stark contrast with what we faced 10 years ago. A new plant for 50 more years looked then like the classic done deal. It seemed inevitable in view of the California Energy Commission's penchant then for approving new plants.
Looking back, it should have seemed futile to try to modify the Duke project with effective environmental protections, given the bandwagon Duke was riding and the money the rich and powerful East Coast corporation was throwing at anyone who would get on board. We were naive about contending with big money on a subject we knew little to nothing about. But we had confidence born of our rich heritage of community action in Morro Bay. Some of us, along with our courageous forerunners, had fought many battles to save Morro Bay from developmental face-change going back at least 30 years. And won them all. So this was nothing new - at least it seemed like it. And, as it has turned out, well, the new Duke plant hasn't been built, has it?
The latest in a long line of citizen activist organizations in Morro Bay, CAPE took a different form as a nonprofit, independent, nonpolitical organization to inform its members and residents alike about the effects of a new plant on the community and the Estuary - and not just any new plant but that specific Duke project. The effort was inspired by the indescribably-beautiful Estuary, along with historic Morro Rock (oh, yes, the birds atop also would have been affected), which together make the community of Morro Bay so incomparable. The effort was also inspired by the determination to prevent potential destruction of the Estuary, which would have left the Rock without its companion in nature.
The Estuary is designated an Environmentally Sensitive Habitat Area (ESHA) by the California Coastal Commission - the only ESHA on the California coast from which a power plant taps its fish-ladened water. Billions gallons of water containing untold numbers of aquatic life have been withdrawn by the existing power plant over the past 40 plus years or so, killing them all.
Studies conducted in connection with the Duke project showed that more than 400 million gallons of water per day would be pumped out of the Estuary by the new power plant Duke was proposing. And between 17% and 33% of the fish and crab larvae from the Estuary would be killed - along with more than 100,000 adult fish and macroinvertebrates, like crabs, annually, Duke's own studies showed. It is a fair assumption that the toll on marine life by the existing plant has been much the same from the early 1960s until about seven years ago when Duke started to scale back operation. That is because the volume of water used by the old plant and the volume expected from the new plant are comparable.
In addition, the nurses were eventually were proven correct. A report by the staff of the California Energy Commission (CEC), which reviewed the Duke project for licensing, concluded: "Many epidemiological studies have shown that exposure to particulate matter is associated with a variety of health effects, including premature mortality, aggravation of respiratory and cardiovascular disease, changes in lung function and increased respiratory symptoms...and altered respiratory defense mechanisms."
The Estuary and Rock also represent the source of the value of businesses and properties in Morro Bay, which we soon realized also needed protection from, as the evidence began to show early on, a larger plant that would release more emissions into the sky over Morro Bay and actually divert more water from the Estuary.
As the CEC review of the proposed plant began to make clear by 2002, it would be a far cry from the smaller, cleaner, and better plant that Duke claimed.
CAPE has never opposed a new plant per se, but on Dec. 9, 2000, less than two months after Duke filed its second application with the CEC to build a new $600 million plant, CAPE members informally decided that what Duke was proposing, on its face, would be extremely destructive to the health of residents, not only in Morro Bay but many miles downwind as well, and to the aquatic life of the Estuary, the lifeblood of the community. It was based on the voluminous Duke application to the CEC, one of two state agencies that must approve construction.
But our worst fears then were far surpassed in the four years of CEC review of the application, staff reports, hearings, filings, and expert testimony. Typically, CEC staff had said, new plant reviews take 12 to 14 months for the Commission to issue a decision. But the Morro Bay case is believed to be the longest on record, largely because no final decision has yet to be issued. If anyone can be thanked or blamed for that, it is Duke, which refused to consider any kind of plant design other than one using Estuary water for cooling.
The company also spent a year trying - irrationally it seemed to nearly everyone - to eliminate the Coastal Commission (one of several state agencies to oppose the Duke project) from the state review process, despite the Commission being required by statute to participate. Duke lost.
Ironically, what CAPE and its supporters have consistently advocated - effective protections of public health and the Estuary - could well have probably made it possible to build a new plant, had those protections become part of the project, in light of binding federal court decisions that were issued in 2004 and 2007 banning use of estuary, bay, and ocean water for power plant cooling. But Duke and its supporters, including nearly all the members of the City Council through the years and organizations such as the Morro Bay Chamber of Commerce, would have none of it. They willingly supported Duke all the way while ignoring or minimizing how residents and the Estuary would suffer, as demonstrated by CEC staff, CAPE, and other evidence.
Throughout, Duke expressed supreme confidence that the CEC would grant a license to build the project it wanted. And the CEC panel that reviewed the proposed plant over those years seemed to justify that likelihood by agreeing with virtually all Duke's arguments that the new plant would meet required standards and rejecting challenges, even numerous and major ones from its own professional staff as well as other state agencies. So it appeared Duke would get whatever it wanted from the CEC, regardless of the facts - which turned out to be the case, as Part Two in next month's issue of the Journal will demonstrate.
Jack McCurdy is co-president and co-founder of CAPE. This article was not written on behalf of CAPE and does not necessarily reflect its views.
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