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Morro Bay power plant fallout

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Operators of the Morro Bay Power Plant have had a financial parting of ways with Southern California Edison.

On May 30, the plant operator, Houston-based Dynegy, announced that its primary output contract to sell electricity was canceled in mid-May. The other party wasn’t disclosed due to a confidentiality agreement in the contract, but New Times learned the contract in question was with Southern California Edison, a Rosemead-based company and the operator of the San Onofre Nuclear Generating Station.

In a news release, Dynegy assured investors that its power plant in Morro Bay is not poised to shut down anytime soon.

“Dynegy is actively seeking other commercial arrangements …,” the company said.

Dynegy spokeswoman Katy Sullivan told New Times the plant will continue to generate power as needed and perhaps sell its energy in other markets. She said Dynegy doesn’t plan to lay off any of its Morro Bay employees. But Sullivan couldn’t comment on details of the contract, nor how significant it was to the company’s finances.

“It was the primary long-term contract for the facility, but the facility still has the opportunity for either new contracts or to participate on a merchant basis as needed,” she said.

Southern California Edison didn’t return a call for comment. The company operates a nuclear power plant located between Los Angeles and San Diego. However, the San Onofre plant has been idle since January.

The Morro Bay Power Plant is scheduled to go completely offline in 2015 due to new state regulations that require such facilities to upgrade cooling systems. Dynegy has said it doesn’t plan to make the upgrades, but the company hasn’t made public its plans for the future of the Morro Bay plant.

Though it’s premature to discus the future of the plant site, Sullivan said, the canceled contract with Southern California Edison has accelerated conversations with city officials over what will happen after the shutdown.

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