Morro Bay Council to check Duke deal


On Nov. 14 the Morro Bay City Council will decide whether to approve an outfall lease agreement with Duke that would bring more than $1.5 million to the city by the end of January, and an end to nearly five years of negotiations.

The outfall lease agreement allows Duke to discharge water used in the plant's cooling process through a canal at the base of Morro Rock. Over the last few years of negotiation the outfall lease has been the city's main tool to leverage a favorable agreement with Duke.

During the last year the city and Duke reached an impasse over two main points: The city originally wanted Duke, or the current property owner if Duke sells the plant, to be responsible for tearing down the plant. Also, the city originally asked that the owner continue to make payments to the city if the plant stopped operating. Both these two points were dropped from the current agreement that the City Council is expected to sign Monday.

Morro Bay City Attorney Rob Schultz said having to drop these two points is somewhat ironic. Without these two clauses, the property is likely more appealing to a future developer.

Schultz said $1 million will go to the city's general fund and $500,000 will go to the harbor fund.


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