Dynegy officially closes the Morro Bay Power Plant

nwilson@thetribunenews.comFebruary 5, 2014 

The power plant that has operated in Morro Bay since the 1950s and once employed more than 100 people has officially shut down. The Morro Bay Power Plant, widely identified by its three 450-foot stacks towering above the nearby bay, was formally retired Wednesday.

The closure marks the end of an era for a local industry that helped shape the community of Morro Bay, which became an incorporated city in 1964 after the plant was built.

Dynegy, the Houston-based owner of the plant, has made no formal plans about its future intentions for the site. But the corporation is seriously exploring the idea of building a wave energy farm that would transfer power from an offshore facility to existing transmission lines at the plant.

“We’d like to be a participant in the wave energy process,” said Alan Padgett, the company’s managing director of commercial operations. “We’re looking into whether the technology is viable.”

Representatives from Dynegy and a New Hampshire –based wave energy technology company, GWave, have been in discussions for about a year regarding the potential for a wave farm off the coast of Morro Bay.

Dynegy and Gwave officials will visit the week of Feb. 17 to speak with local stakeholders — including city officials and fishermen — and to assess wave conditions as part of their research to potentially launch a wave energy operation by 2017.

Robert Stoddard, executive vice president of GWave, said that a Morro Bay wave farm would involve more than 20 licenses and permits and significant planning, including coordination with the local community. The objective is a feasible, profitable project that would minimally impact the environment or local fishing operations.

“Our goal is to meet Morro Bay’s needs and California’s needs,” Stoddard said. “We’ll be building partnerships and reaching out to the community. We want to have as responsible of a development as possible that uses the energy of the ocean in the most efficient way.”

Dynegy also is looking into smaller scale options for battery storage of solar energy. The plant site could be used to store an estimated 10 to 20 megawatts of solar energy produced by other companies offsite, Padgett said. The details of those plans are still in the early stages.

Dynegy intends for the site’s alternative uses to be “economically viable and compatible with the community,” said Katy Sullivan, Dynegy’s spokeswoman.

Winding down

In the meantime, about 30 employees are spending their final few weeks of work at the plant, which had been operating at about 5 percent of the power it’s capable of producing in recent years, Sullivan said.

The 650-megawatt plant operated around the clock during the 2000 energy crisis, said outgoing plant manager Steven Goschke. The plant has operated at just one-sixth that capacity in recent years, he said.

Goschke has been with the company since 1988, moving back to the county from the Bay Area after earning a degree in agricultural engineering from Cal Poly. Like the others still there — with some leaving at the end of the week and others on until March 7 — Dynegy offered Goschke a severance package or a chance to relocate to another Dynegy facility elsewhere in the country.

He’s decided to take the severance because his wife teaches at Cal Poly and he doesn’t want to move. The departure will mean leaving employees with whom he has worked for decades — describing them as “salt-of-the-earth” people who dedicated much of their lives to the plant.

“We’re having an open house here for the current and former employees on Feb. 21 who have worked here over the years,” Goshke said. “It will be a chance for us all to get together again.”

John Ashford, 71, has worked at the plant for 51 years, conducting a wide variety of duties from painting and machinery maintenance. During emergencies, he has worked for up to 36 hours straight to keep the system up and running.

“I was going to retire, but the plant retired before me,” Ashford said. “This is just a superb group of people to have worked with.”

After the employees are gone, Dynegy will provide 24-hour security staffing to ensure safety on the site, demolish some of its buildings, and remove oils and hazardous materials, Goschke said.

The three high-rise stacks, which some call a Morro Bay landmark and others an eyesore, will stay for the time being. Dynegy officials didn’t know when they might be removed in the future; Goschke said the process is very expensive.

Turbines, generators, and electronic monitor rooms built decades ago, with a science-fiction feel, will remain as well.

The company and city have discussed ongoing security at a site that could invite thrill-seeking trespassers, curious kids, or transients.

“They’re ultimately responsible for the property,” Morro Bay police Chief Amy Christey said. “We’ve made recommendations that would help them on the front end to successfully maintain public safety.” Dynegy isn’t revealing all of its security measures to “to maximize their effectiveness,” Sullivan said.

Dwindling operations

Dynegy decided to close the site because it was no longer economically viable. Over the past decade, the plant typically has only run during peak periods of energy consumption — such as hot summer stretches or a cold spell in December.

Continued operation would have required expensive upgrades by 2015 to comply with new state environmental laws to eliminate or drastically reduce the amount of seawater used for cooling.

At one time, the plant served up to 1 million customers, primarily in the county and in the Central Valley. But in recent years, the production reached about 325,000 when the plant was operating.

“For a merchant power plant like Morro Bay, electric production is determined by market conditions — specifically wholesale power prices — and local system reliability needs,” Sullivan said.

The agency that operates the state’s power grid, the California Independent System Operator, concluded that the closure of the plant “does not negatively impact the ISO energy supply,” clearing the path for the plant’s retirement. “The ISO did not see any issues with the retirement of the Morro Bay units,” ISO spokesman Steven Greenlee said.

Next steps

Wave energy is a relatively new and developing field of research that involves use of turbines to extract energy from the flow of the ocean. Successful farms have been constructed in Europe and California is being considered for a test site for various technologies.

Cal Poly's Institute for Advanced Technology and Public Policy recently received a $750,000 federal grant to assess the feasibility of testing wave energy off the California coast.

Padgett, Dynegy’s commercial operations manager, will be among those visiting Morro Bay with GWave in a couple of weeks. They plan to take a vessel out to examine local ocean areas for measurements of wave densities, he said.

A preliminary permit is expected to be filed Friday with the Federal Energy Regulatory Commission, which would give priority for an operating license and allow studies and stakeholder outreach.

Stoddard, of GWave, said that a conservative estimate for when the project could be implemented is 2017, possibly 2016. The farm would provide local jobs, though specific numbers haven’t been calculated, he said.

“We aren’t considering other options for it now,” Padgett said. “We pretty much have our focus on wave energy and we’ll see how that goes.”

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