Duke Energyâ€™s answer to Morro Bayâ€™s ultimatum is a definitive maybe.
After the city set an Oct. 6 deadline for the company to sign a new lease, the company has told the city that they will agree to that lease only if they can go ahead with the modernization plan and find a long-term contract for the sale of their electricity.
For Duke, running the plant in its current state is unfeasible. In the letter to Morro Bayâ€™s Mayor Bill Yates, Randy Hickok, vice president of Duke Energy, writes that, â€œThe economics of the existing plant are such that we cannot enter the draft â€¦ lease related to the existing
According to Hickok, Duke is looking at several options to keep the current plan viable. If Duke discontinues using the plant then they are responsible for demolishing it, which is estimated to cost $50 million.
Duke probably needs a long-term contract to continue operation, and that deal likely hinges on the modernization plan going through, speculates Rob Shultz, Morro Bay city attorney.
Dukeâ€™s lease with Morro bay ends on Nov. 15.