Coastal Alliance on Plant Expansion

CAPE  believes strongly that any extension of the outfall lease to allow operation of the Morro Bay Power Plant with once-through cooling would be counterproductive both environmentally and economically and would not be in the best interests of residents and taxpayers, whose health and property values as well as businesses could be negatively impacted.

Risk to the Estuary

* Extending the outfall lease has enormous environmental consequences interrelated with economic effects. Our overriding concern is that of risking irreversible damage to the Estuary by continuing to kill its crab and fish larvae and other marine organisms creates a risk to residents and their property values and the businesses that,  in so many ways, rely on the Estuary for their customer market. Both share this potentially-devastating risk because their assets and livelihoods are grounded in a healthy, functioning Estuary. It is a risk because the withdrawal of water containing larvae that are destroyed in the plant, the killing of marine life from urban runoff of pollutants, the discharges from boats using the Estuary and the California Men’s Colony’s release of toxic materials downstream into the Estuary combine to deplete the Estuary of marine life. These harmful effects have been exacting their toll for some 55 years since the first two generating units were built.

Cumulative Impacts Greater

* A new dimension of impacts from the power plant rose to a new level of concern only recently. That involves the overlap of ocean from which the Morro Bay plant and the Diablo plant draw water for their once-through cooling systems and kill billions of aquatic organisms jointly.  California Energy Commission staff concerns about this “cumulative impact” from this overlap in ocean source area for the two plants led the staff to fund a scientific study to measure the extent of that impact. But the study did not go forward because the state water board has indicated it will adopt regulations requiring best technology available that does not use once-through cooling by coastal power plants. But the CEC staff had seen enough evidence that when power plants are near each other and draw their water from common areas, which is also the case in several situations in Southern California, the cumulative effect is greater than if plants were drawing from independent areas.

Multiple Stressors on Estuary

* EPA regulations adopted in 2004 on existing gas-fired coastal power plants broadened the definition of cumulative impacts to include not only “multiple facility intakes…within a specific water body,” but also “the existence of multiple stressors within a water body” and “long-term occurrences of impingement and/or entrainment losses that may result in the diminishment of the compensatory reserve of a particular fishery stock.” So we believe that logically and realistically, cumulative impacts on the Morro Bay National Estuary should be expanded to include not only the common ocean sources of water withdrawals by the Morro Bay and Diablo plants but also (1) the ongoing toxic discharges from the California Men’s Colony that have been documented to kill marine life, (2) pollutant discharges from boats and other vessels using the Estuary, (3) the myriad of contaminants from urban runoff, and (3) the cumulative effects over time as the impacts compound and mount up. This is the real cumulative impact of what the priceless Estuary, which is a national monument that all Americans are responsible for protecting, must endure.

Estuary Could be Put in Jeopardy

* All this means, as the EPA regulations laid out, is that the very existence of the Estuary–on which this community depends–as a healthy, functioning water body could be put in jeopardy. EPA regulations put it this way:

“…EPA is concerned that even if there is little evidence that cooling water intakes alone reduce a population’s compensatory reserve, the multitude of stressors experienced by a species can potentially adversely affect its ability to recover…the opposite effect of ‘depensation’ (decreases in recruitment as stock size declines…) may occur if a population’s size is reduced beyond a critical threshold…In some cases, recovery of the population may not be possible even if the stressors are removed. In fact, there is some evidence that depensation may be a factor in some recent fisheries collapses.”

Collapse has actually occurred elsewhere in the United States. “Both scientists and fishermen have documented the collapse of multiple fish species” in Mount Hope Bay due to the impact of once-through cooling used by the Brayton Point Station, a large power plant owned by Dominion in Somerset, Mass., according to an article in the Boston Globe on Dec. 24, 2006. The Globe in another article on Dec. 18, 2007, reported that the “once-teeming fishing ground on the Massachusetts-Rhode Island border…is now a dead zone for many species.” The articles’ information was drawn from EPA reports and studies. The EPA forced Dominion to convert its once-through cooling system by 2012 to a closed-cycle system after years of filings, hearings, orders and legal challenges by Dominion. It is true that in the case of the Brayton Point plant, bay water was not only withdrawn, killing many fish, as the EPA documented, but heated water from the plant was then discharged back into the bay, which is not the case in the Morro Estuary. However, as EPA indicated, it is not known whether the entrainment and impingement in withdrawal of water alone could have caused the collapse of the species.

Estuary Now Faces Unknown Risk

* Risking a “dead” Estuary is not worth the $750,000 a year that the city has received in recent years for use of the outfall channel on public land by the plant’s owners to continue the major component of these cumulative effects caused by once-through cooling. Duke’s own biological studies showed that the proposed new plant would kill between 17% and 33% of the fish and crab larvae in the Estuary, and we all know that the present plant with only two of its original four generating units still operating has not come close to operating at its capacity. But that is a big part of the threat to the Estuary–we do not know what the impact has been and will be from a plant operating on a limited basis. How can that unknown be calculated as part of the cumulative impacts facing the Estuary and this community? It constitutes an unknown risk, which is the worst kind. So there is no way to predict if continued operation of the plant on a limited basis–with the distinct possibility, if not likelihood, that the other stressors will continue–could tip the Estuary over the edge and into collapse. That news would quickly spread around the state, the nation and possibly the world, and who would want to own property or a business in, much less visit, a coastal community in that degraded situation? We think it is clear that avoidance of that unknown far outweighs almost any amount of money, much less what an extension of the lease under present terms would provide.

Lease Extension Faces Legal Questions

* There also are legal questions raised by any lease extension. The State Lands Commission is acutely aware of the environmental impacts of once-through cooling and in that context, has adopted a resolution opposing lease extensions like the one under consideration in Morro Bay. Although this resolution was later vacated on a technicality, the sense of the Commission-approved policy outlined in the resolution and the intent of the Commission to oppose extensions remain intact. As it noted in the resolution, the Commission has jurisdiction over the public land in which the Morro Bay plant outfall channel is located as well as lands beneath the bay and state-owned tide and submerged land from the shoreline out three nautical miles. It is also charged with managing these lands pursuant to the Public Trust Doctrine, a common law precept that requires these lands be protected for pubic use. The Commission stated that California has a significant number of power plants that use once-through cooling, the majority of which are located on bays and estuaries where sensitive fish nurseries for many important species are located. The environmental costs of entrainment and impingement are high, it stated,  and once-through cooling harms the environment by “killing large numbers of wildlife, including fish as well as larvae and eggs.” The resolution recognized that new Clean Water Act regulations prohibit new plants from using once-through cooling and require a significant reduction by existing plants. The policy on lease extensions was outlined in a resolution adopted on April 13, 2006, even before the landmark federal Second Circuit decision that mandated elimination of once-through cooling for all plants, new or old. The Commission, while urging the California Energy Commission and state water board “to expeditiously  develop and implement policies that eliminate the impacts of once-through cooling on the environment, from all new and existing power plants in California,” pledged for its part to “not approve new leases for power facilities, or leases for re-powering existing facilities, or extensions or amendments of existing leases for existing power facilities, whose operations include once-through cooling, unless the power plant is in full compliance, or engaged in an agency-directed plan to achieve full compliance, with requirements imposed to implement both Clean Water Act  Section 316(b) and California water quality law as determined by the State Water Resources Control Board, and with any additional requirements imposed by state and federal agencies for the purpose of minimizing the impacts of cooling systems on the environment.” This policy position should effectively disqualify any lease extension in Morro Bay because this plant is not engaged in any plan to achieve full compliance with the Clean Water Act, as set forth by the Second Circuit decision. The Commission added that it  explicitly “calls on public grantees of public trust lands to implement the same policy for facilities within their jurisdiction.”  This clearly includes the city of Morro Bay.

Plant Operating with Expired Discharge Permit

* The other legal point involves the National Pollutant Discharge Elimination System (NPDES) permit that allows the plant to withdraw water from the Estuary and then discharge heated water into Estero Bay. For nine years, the Morro Bay plant has been operating with an expired federal NPDES discharge permit. The expired permit has been and is still allowed to remain active on administrative extension without normal required regulatory review every five years. That extension was originally justified by the Central Coast Regional Water Quality Control Board staff on grounds that since the Board was about to review an application for a new permit for a new plant when the existing permit expired in 2000, dissolution of the old permit or requiring review of it in the interim while a new permit for a new plant was under consideration would have been inappropriate and an unnecessary burden on the applicant. But Duke Energy and the current owner, Dynegy, have both stated openly and publicly that they no longer had or have plans to build a new plant. In fact, in a letter to the Morro Bay City Council dated Sept. 9, 2008, Dynegy stated it plans to close the plant by 2015 in light of draft state water board regulations prohibiting once-through cooling at such plants. Therefore, the current, expired permit has been illegitimate for approximately the past five years when plans to build a new plant were abandoned, and the administrative extension of the permit cannot be justified now because the rationale for its extension no longer exists. Continued extension does not conform to statutes covering such permits. Pursuant to state and federal law, NPDES permits are to be issued for fixed terms not to exceed five years.  (33 U.S.C. 1342(b)(1)(B); 40 C.F.R. 122.46(a); Cal. Water Code 13378). Although CAPE recognizes that permittees can have their permits administratively extended beyond the initial permit expiration date, the administrative extension of the current NPDES  permit exceeds the reasonable time envisioned for such exceptions to the five-year review requirement. Federal regulations suggest that the administrative extension period is to be used when “issuance is impractical due to time or resource constraints.”  (40 C.F.R 122.6(a)(2)). However, far more than the length of an entire permit cycle has already passed since the last time the Regional Board reviewed and issued an up-to-date permit for this facility. Therefore, the City Council is faced with extending an outfall lease that the State Lands Commission’s policy as stated in a resolution does not sanction and extending a lease that would be used by the plant owner in conjunction with an NPDES permit that is legally invalid, based on statutes just cited.

Unauthorized Impacts on Estuary Continue

* With this illegitimate permit still in effect and no indications that the regional board staff has any interest in reviewing the legitimacy of the permit in light of the absence of any plans to build a new plant, the plant, nevertheless, continues to operate, withdraw millions of gallons of water from the terribly-stressed National Estuary, destroy untold billions of fish and crab larvae from the Estuary with abandon and kill other marine life on the north edge of Morro Rock with its heated discharges, all documented in biological studies submitted to the California Energy Commission and regional board. It seems clear that the plant is imposing unauthorized destructive impacts on an Environmentally Sensitive Habitat Area in contravention of state policy and state and federal laws.

Other Challenges to Expired Plant Permits

* Morro Bay is not alone in facing a seemingly-timeless permit administrative extension, although ours is the longest-running in the state. The Mirant Corp. has requested the San Francisco Regional Water Quality Control Board to renew an NPDES permit for the Potrero Power Plant that withdraws and discharges water into San Francisco Bay. That permit was granted in 1994 for a five-year term, administratively extended by the Board until 2005 “without public review required by state and federal law,” a Board of Supervisors resolution stated. On May 10, 2006, the permit was extended administratively again to Dec. 31, 2008. Last July 1, Mirant filed an application to renew the permit. Last Oct. 28, the Board of Supervisors unanimously resolved to oppose any new or administratively extended permit “to protect the Bay and the public from further harm” caused by once-through cooling and emissions to the health of “people who live around it.” The Board advocates closure of the plant, but if it is to remain operational, it should not use once-through cooling. If renewal of the permit is not rejected by the regional board, the resolution said the Supervisors would “take all appropriate legal action” to block its continued use.

Best Course for the City Council

* In view of all these facts and circumstances, the best course for the City Council, we believe, is to let the lease expire as scheduled in three years, 2012, and begin moving with dispatch to investigate options for converting the plant site to an alternative use or uses, which would provide a certain revenue stream for the city and its residents long-term, instead of a short-term cash fix. Every year that goes by without long-range planning for a new future for the plant site and the community is a year of lost time for making that happen and lost revenue that the city can count on for the first time in many years.

Revenue Available for Alternative Use Studies

* Revenue to pursue such an alternative use study and plan is available from the Ocean Conservancy, which administers the $5.4 billion bond issue approved by voters in 2006 for beaches, bays and coastal protections and improvements, such as urban waterfront renewal. Advocates of the conversion of the Redondo Beach power plant, which is old and outmoded like the Morro Bay plant, have conferred with Conservancy staff members since 2006 and been told that bond funds would be available for a city-approved plan to convert the plant site to alternative use, such as a park and restoration of the estuary there. We were told during a visit by a Conservancy staff member during a Conservancy staff visit to Morro Bay several years ago that a plant conversion project in Morro Bay would likely be eligible for similar funding under the bond issue. But waiting too long to pursue these funds could lead to other communities laying claim ahead of Morro Bay and exhausting them. The City’s North Embarcadero Waterfront (N.E.W.) Futures Committee has made plain that they, as representatives of residents, favor exploration of alternative uses of the plant site, and their backing will go far in informing and winning the support of voters.

CAPE urges the City Council to look ahead optimistically and plan for the future benefit of the community guided by your leadership in realizing the potential of making the north shore of the Estuary a place that residents can be proud of and that people far and wide will want to visit, which will benefit the city in economic terms in ways that the plant with its numbered days could never match. It is not time to be penny wise and pound foolish when the well-being of Morro Bay’s most valuable and cherished asset may be at risk.