New State Policy Could Derail Morro Bay Power Plant Closure
by Jack McCurdy
The long-anticipated closure of the Morro Bay Power Plant, announced in 2008 by plant owner Dynegy, marking a turning point in the community's history, has now grown more uncertain with the release of the latest version of a proposed new state policy aimed at restricting use of estuary, bay, and ocean water to cool California's 19 coastal power plants, including Morro Bay's.
As with the other plants along the coast, the Morro Bay plant kills billions of fish and crab larvae along with countless numbers of phytoplankton, zooplankton, and other species and has contributed to the Morro Bay National Estuary becoming, as a state agency put it, "impaired and in ecological decline." Water is drawn by the plant from the Estuary in a process called once-through cooling (OTC). The plant is said to operate about six per cent of the time now, and the precise toll on marine life is unknown.
The Morro Bay plant, nearing 55 years in age and one of the oldest and most inefficient plants in California, was designated for closure by 2015 in a letter dated September 9, 2008, from Dynegy to the Morro Bay City Council. The reason given was because an earlier draft of the proposed state policy specified that date for the plant to stop using water from the Estuary for cooling, without which the plant cannot operate as now designed. The same date is in the new version of the policy, but enforcement of compliance with dates for plants to cease use of OTC has been weakened further.
New loopholes have been added to allow the board to waive compliance dates (a) if state authorities decide a plant's production of electricity is needed to meet state demands, or (b) if a plant owner or operator claims inability to obtain permits for modifications to achieve compliance. The waivers would be for up to two years.
Morro Bay's 2015 compliance date could be affected. Randy Hickok, managing director of Dynegy's western division, was asked on March 29, whether Dynegy is considering changing its plan to close the plant in 2015. He noted that the latest draft policy provides for six months after a new policy is adopted by the board before plants are required to submit plans to implement the policy. During that time, Dynegy will review its alternatives to determine if there is "any technology" that would be feasible to enable the plant to continue to operate, absent the use of OTC. He said an engineering firm is studying the matter for Dynegy.
There have been reports that Dynegy might consider installing what are called "peaker units" to generate electricity, which do not require water for cooling, and that those units might be part of a proposal by Ecobaun to develop a renewable energy university research center on the plant site in partnership with Dynegy.
However, even though the board policy does not require the Morro Bay plant to stop using OTC until 2015, the board's Draft Final Substitute Environmental Document, which contains the proposed draft OTC policy, states that the plant after 2011 is "not needed for resource adequacy" to supply the state with adequate energy. Why the plant would be allowed to use Estuary water for cooling--with all its damaging impacts to the environment--until 2015 but would not be needed beyond 2011 has been questioned but never explained by the state board.
The latest version of the policy, which would enforce for the first time the U.S. Clean Water Act's 37-year-old requirement that "best available technology," not water from natural water bodies, be used for cooling power plants, was released on March 22 and is scheduled for a vote by the board on May 4.
But comments from the public are required by noon on Tuesday, April 13. The board asks they be submitted to Jeanine Townsend, Clerk to the Board, State Water Resources Control Board or by regular mail to her 1001 I Street, 24th Floor, Sacramento, CA 95814. Or by fax at (916) 341-5620. The board has asked that written communications include “Comment Letter - OTC Policy” as the subject. Points for comments on the policy will be available at Morro Bay Power Plant.org, the web site of the Coastal Alliance on Plant Expansion (CAPE), a non-profit citizens organization that has been monitoring developments involving past attempts to build a new and larger Morro Bay plant for 10 years and current developments involving the plant.
CAPE opposed Duke Energy's failed attempt to build a new and larger plant because of impacts on public health and the Estuary, which were documented by the California Energy Commission staff, but has never taken a position on any other type of upgraded or new plant.
CAPE did not support the previous policy draft last December, saying "vital revisions . . . are needed to render the Policy acceptable, effective, in legal compliance and consistent with the statutory goals."
As was true of the earlier version, this draft appears to place excessive weight on the effects of restricting or prohibiting OTC with regard to what is termed grid reliability, the capacity of the state's energy sources to provide consumers throughout the state with adequate supplies of electricity. This is deemed the highest priority in the policy, to the extent that protection of the environment and aquatic life in coastal waters is rendered of secondary importance. This despite a 2007 federal Second Circuit Appellate Court decision, now the law of the land, that requires best available technology and, in effect, prohibits the use of estuary, bay, or ocean water for power plant cooling. As the decision emphasized, use of estuary, bay, or ocean water for such purposes is not and never has been allowed by the U.S. Clean Water Act. Yet it has been permitted by scores of power plants throughout the country for decades.
There is broad agreement that reasonable steps must be taken to phase out use of OTC, under that decision, but how soon it must be done is the unsettled question. The state board is proposing to allow some gas-fired power plants up to 10 years to stop using OTC and nuclear plants like Diablo Canyon up to 14 years, which many believe is unjustified.
In addition, the December version and the current draft of the policy both open the door to plants avoiding compliance with even those 10-to-14 year requirements as well as all the other dates, if they make appeals to the board that meeting requirements to halt the use of OTC would pose a hardship. At the same time, the Public Utilities Commission, California Energy Commission, and California Independent System Operator would be given the authority to determine if ending OTC would threaten grid reliability and to recommend waivers of compliance dates to the board.
Amidst all this concern for grid reliability and opportunities for power plants to avoid established deadlines to cease the use of OTC, the impacts of OTC to marine life, which the economies of many coastal communities, including Morro Bay, depend heavily on, are hardly mentioned in the draft policy. In fact, the Second Circuit decision is not cited as all, as if the board were motivated on its own to enact the first OTC policy in state history and is not required to conform to the court's landmark ruling.
That does not mean that grid reliability is not an issue of concern, especially in light of California's disruptive "shortage" of electricity in 2000-01, which was caused by the manipulation of the energy market by Enron, Duke Energy, Dynegy, and other power generators, according to the Federal Energy Regulatory Commission, and destroyed the political career of Governor Gray Davis. But ending OTC and forcing power plants to use some other form of cooling, such as dry cooling (where a finite amount of water is circulated within the plant, as in a car radiator, in a process called closed-cycle cooling), may not be the threat to grid reliability that those state agencies contend it is.
In fact, the state board's own consulting firm found two years ago that " . . . under all but the most extreme scenarios, more than enough power plants are expected to be operating in 2015 to more than compensate for any or all OTC plant retirements, with a projected 28 percent reserve margin of supply over demand in the western half of North America." (Page 3, "Electric Grid Reliability Impacts from Once-Through Cooling in California," April, 2008.
The study went on to state that its investigation "showed that given sufficient time to react, the electric industry could likely tolerate and compensate for mass OTC plant retirement at relatively modest costs to the ratepayer." The most "realistic scenario," the study said, "in which some OTC plants would be retired while others repower or convert their cooling systems, showed potential for significant benefits to the environment because the overall power sector would be more efficient and produce fewer emissions, and because marine ecosystem impacts caused by use of OTC technology would be greatly reduced."
And, it added, "The modeling showed that even if all OTC plants retire in the state, including the nuclear units, the resultant need for new transmission infrastructure to compensate for the lost capacity is relatively modest."
It's not that the state board has challenged those conclusions. It has completely ignored them while allowing the other state agencies to rank grid reliability over protecting the marine environment, in conflict with its own study.
Neither the board nor those agencies, in addressing the legal requirement to phase out use of OTC, have mentioned the explosion reverberating around the state in renewable energy sources, with solar power leading the way. For example, Southern California Edison and the Los Angeles Department of Water and Power, which also has a $2.50 per meter carbon surcharge under consideration to develop renewables in the city, have launched massive initiatives to install solar panels on the rooftops of parking structures and warehouses in their service areas. And the state has programs to promote one million solar panels on the roofs of homes throughout California, which is just starting to take off.
At the outset, the policy states that its intent "is to ensure that the beneficial uses of the State's coastal and estuarine waters are protected while also ensuring that the electrical power needs essential for the welfare of the citizens of the State are met. The State Water Board recognizes it is necessary to develop replacement infrastructure (upgrades or new plants that do not use OTC) to maintain electric reliability in order to implement this Policy and in developing this policy (it has) considered costs, including costs of compliance, consistent with state and federal law."
The operational standard that the policy expects existing plants using OTC to meet is a minimum 93% reduction of its design water intake under Track One and 90% under Track Two. The proposed policy seems unclear on the criteria that would allow some plants to meet the lower intake standard.
Even though compliance dates for the large majority of the 19 existing coastal plant are seven to 10 years after the policy's adoption, the board would require all plants to begin paying money to the state to "mitigate," or compensate for, marine impacts from continued use of OTC, starting five years after the policy is approved. It states that mitigation could include "projects to restore and/or enhance coastal marine or estuarine habitat," commonly known as habitat restoration, in the context of attempting to offset the loss of larvae from OTC.
But the Second Circuit decision prohibited use of such restoration measures to mitigate a practice, OTC, that is unauthorized under the Clean Water Act and under its own ruling. The decision said that " . . . restoration measures substitute after-the-fact compensation for adverse environmental impacts that have already occurred for the minimization of those impacts in the first instance." Restoration measures, it said, are irrelevant to the requirement that best available technology be used for power plant cooling. "Therefore, mitigation . . . may not be under the (its own) decision be used for 'restoration measures.'"
CAPE made this point in comments on the previous draft policy, but instead of addressing the apparent contradiction, the board, in its latest policy, specifically identifies "projects to restore marine life lost" from OTC, such as "protection of marine life in existing habitat," as acceptable methods of achieving mitigation.
Habitat restoration was proposed by Duke Energy to mitigate larval losses that would have been caused by continued use of OTC as part of its proposed new Morro Bay plant, which was before the Second Circuit decision was issued. But serious questions were raised during the review of the Duke project about the effectiveness of such restoration measures in making up for killing aquatic life by OTC.
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.
Belted Kingfisher image on banner by Cleve Nash |
