Dynegy's Morro Bay Power Station Faces Dim Future

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Researched by Industrial Info Resources (Sugar Land, Texas)--Dynegy Incorporated's (NYSE:DYN) (Houston, Texas) 1,042-megawatt (MW) Morro Bay Power Station, located in Morro Bay in San Luis Obispo County, California, has been studied by multiple groups that have determined that the facility's current units need to be retired and the site modernized with new natural-gas-fired combined-cycle units that would be capable of producing 1,200 MW of power. The project has been put on hold because of the Morro Bay community's fighting to keep beachfront property clear of industrial plants, as well as state water regulations that will require changing the once-through cooling system, which has a major effect on the local estuary, to a closed-loop cooling system that reuses the water repeatedly.

Morrow Bay Power Station originally came online in 1956 and has four steam turbine/generator sets. The plant initially had natural-gas- and oil-firing capabilities, but because of emissions requirements, the boilers now use only natural gas. Units 1 and 2 were each 169 MW and were both shuttered in 2003. Units 3 and 4 are still operational, but because of the inefficiency of the units, these are only used about 10% of the time. The operating units both have Babcock & Wilcox (Barberton, Ohio) natural gas front-fired boilers that drive Siemens Westinghouse 345-MW and 359-MW steam turbine/generators that only operate at about 66% capacity.

The plans for Morro Bay's modernization were to construct two 600-MW natural gas-fired combined-cycle power blocks. Each block would consist of two combustion turbine/generators and two heat recovery steam generators plus a single steam turbine/generator.

While the Morro Bay community realizes that there is a need for a local power plant to maintain current grid security, the community does not want a station built on premium beachfront property. According to sources at Dynegy, a modernization of the facility is at least five years out if it is going to occur at all. At present, the plant could be closed as early as 2011 if compromises cannot be worked out.

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