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Panel OKs Morro Bay Power Plant

Energy Commission approval of an updated facility is a key step, but state water authorities still must rule on Duke Energy's cooling plan using seawater.

August 03, 2004|John Johnson | Times Staff Writer

The state Energy Commission gave its blessing Monday to plans for rebuilding and modernizing the Morro Bay power plant, despite concerns that using seawater to cool the new plant will harm sea life.

The unanimous commission vote in Sacramento clears away one of the last major obstacles to an $800-million project that would replace the 49-year-old facility with a more efficient plant. Duke Energy, which would do the work, still must obtain a permit from state water authorities to use seawater to cool the plant's equipment.

"We're extremely pleased," said Patrick Mullen, a Duke spokesman. "We think they made the right decision for the environment and the community."

Duke sold the project as a necessary upgrade that would help the state meet its burgeoning energy demands. The new plant would produce more power -- 1,200 megawatts compared with the current 1,000 -- while using less natural gas.

Opponents, however, contended that the new plant would harm fish and other sea life. Critics also questioned the need for the plant, pointing out that two of the four power units in the old plant are not in use.

The application has been under consideration nearly four years, far longer than most power plant proposals. One of the most divisive and protracted debates was over plant cooling. Duke proposed "once-through cooling," pumping seawater through the plant and returning it to the ocean.

The Coastal Alliance on Plant Expansion, a leading critic of Duke, said that method could kill up to a third of the bay's fish, larvae and eggs each year. Along with the Energy Commission staff, the group backed an alternative known as dry cooling. That process would use giant fans to keep the plant's equipment from overheating.

The city of Morro Bay objected to dry cooling, saying the huge building to house the fans would be an eyesore on the waterfront, where gift shops and high-end restaurants have sprung up. "We would not grant a lease for a hybrid cooling system," City Atty. Rob Schultz said Monday.

Duke officials said dry cooling would add $39 million to the cost of the project. And they argued that fewer fish would be harmed by once-through cooling than are killed by the old plant.

Volatility in energy markets since the collapse of Enron is another hurdle for Duke. Even if water board officials grant a permit to use seawater in the plant, construction could not begin until Duke lined up customers for the power. In the past, said Mullen, an energy producer could obtain financing to build a plant on the expectation that customers would be there when the plant was done. Now, despite continuing concerns over state power supplies, Mullen said political uncertainties about how power plants will be built and operated in California in the future makes it necessary to prove that a customer base exists. Still, "We're optimistic there is going to be a role for independent power producers," Mullen said.

Once work begins, it could take two years to complete. To Morro Bay residents, one of the most visible benefits of the new plant would be the removal of the giant smokestacks that now loom over the waterfront. In their place, Duke says, would be a less-intrusive infrastructure.

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