Morro Bay, energy company reach tentative agreement to tear down power plant stacks
The city of Morro Bay and Vistra Corporation have reached a tentative agreement that would pave the way for the world’s largest battery storage facility where the city’s now defunct power plant is.
Among other things, the agreement also sets up a plan for what will happen to the stacks that have been an iconic part of the Morro Bay skyline since the power plant was built in the 1950s.
Spoiler alert: The stacks are probably coming down.
The city announced Friday that the City Council will consider a memorandum of understanding with Vistra Corp., a Texas-based energy company, at its meeting Wednesday.
According to a city staff report, as part of the MOU, Vistra has committed to tear down the three stacks at the property, unless the city protests, by the end of 2022.
Demolishing the stacks is a potential first step toward Vistra’s larger plan to build a 22-acre, 600-megawatt battery plant in Morro Bay.
At twice the size of the company’s current largest battery storage plant, Moss Landing Energy Storage Facility in Monterey County, the Morro Bay plant would be the largest such battery storage plant in the world.
The city and Vistra have been engaged in discussions on the project for the better part of a year.
Wednesday’s meeting will represent the first major hurdle for the project as the MOU is brought before the City Council for deliberation.
The MOU also clears up some legal hurdles that have waylaid the property’s development.
According to the staff report, Vistra is agreeing to sell land easements along the property, which it owns, to the city for $1. Officials have long sought those easements, saying they are necessary for the Morro Bay water reclamation facility project.
Morro Bay and Vistra have been entrenched in litigation surrounding the easements, but if the MOU is approved, that lawsuit would be dropped, according to the staff report.
In it, the city also agreed to remove a clause from Vistra’s existing lease and modernization agreement that would have allowed the city to buy back the property if the existing building and stacks weren’t demolished by 2033 — a clause that Vistra claimed made it difficult to commit to developing the property.
The agreement also guarantees that Vistra will continue to pursue development of the battery storage facility and that the city and Vistra shall “negotiate in good faith to reach a development agreement for the battery project.”
This story was originally published June 5, 2021 at 9:00 AM.
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