After two false starts, removal of the six, 32-foot tall oil storage tanks at the Morro Bay Power Plant is scheduled to begin on Monday, August 22, the California Energy Commission reported.
The project is expected to take six to eight weeks, the commission staff said.
A spokesperson for Dynegy, the plant owner, had said in May when the removal was planned in June that 18-wheel trucks with flatbed trailers will remove the debris from the tear down of the tanks. They will be traveling from the plant along the Embarcadero southward to Beach Street and then to Main Street, turning left and heading north to Highway 1 and then eastward.
The trucks will be on that path about eight hours a day between the hours of 7 a.m. and 5 p.m. for an estimated six to eight weeks after the work begins.
Dynegy had intended to begin removing the tanks last August, but postponement was blamed on obtaining approval from the Commission, which reportedly lacked personnel to oversee the project at that time. To avoid undertaking the work in the rainy season late last year, the work was put off until this year.
The removal was then scheduled to start on May 23, Dynegy said, but was postponed because of the large number of bird nests found at the site and the need to wait until the birds had completed their nesting cycle. The birds are American Kestrels, Western Gulls, and Cliff Swallows. Their nests were on or near the tanks themselves, a Dynegy spokesperson said. The commission concurred in the postponement because of the birds.
The removal will be overseen by the commission, which said it will have staff present on site each week to monitor the activities. The Energy Commission staff will be making weekly visits to the site, a spokesperson said.
The plant owner is required to remove the tanks under an agreement with the city to lease waterfront property on Estero Bay where water withdrawn from the Morro Bay National Estuary and used to cool the plant—when it operates, which is infrequently—is discharged heated into the ocean next to Morro Rock.
Morro Bay city attorney Rob Schultz said the plant owner was required to remove the tanks starting sometime after September, 2009, if there were no plans afoot to rebuild or replace the old plant. No such plans have been submitted to the Energy Commission, and none has been discussed since 2005 when Duke Energy sold the plant and left the state.
Under a new state policy, Dynegy must end withdrawal of water from the estuary in 2015. Initially, the company said it would comply, either by terminating operations or changing to some other kind of operation. Since then, it has reported to the state that it is considering a number of options but has not identified any specific plan for use of the power plant site. (See Slo Coast Journal June 2011)
Dynegy was almost sold late last year and earlier this year, and the Morro Bay plant was to be sold to NRG Energy in a breakup of Dynegy assets. But the deals fell through due to wrangling among stockholders. Management and some of the board members have been replaced, and the company is seeking to restructure and refinance its large debt, which has caused some analysts to suggest that Dynegy could face bankruptcy. The restructuring has also led to a number of lawsuits (Dynegy Sacrifices Bondholder Interests to Duck Default Corporate Finance)
Under that planned restructuring, ownership of the Morro Bay Power Plant would be transferred to a subsidiary, GasCo. But a Dynegy spokesperson said that move "doesn’t have any specific effect on how the facility will be operated going forward. The issues that affect the Morro Bay facility future operations will remain the same as they are now, i.e. future power and gas markets and environmental regulations."
Whether the restructuring will proceed is unknown because of the lawsuits.
