Ask anyone shopping the Embarcadero how long until the three stacks come down, and you'll get a confident answer: soon, there's a battery storage deal in place, it's basically decided. Ask when that deal actually closed, and the confidence gets vaguer fast.
Here's what's true as of this fall. The company that owns Morro Bay's retired power plant walked away from its battery storage project in April 2025. Seven months later it confirmed it won't pursue the backup plan either. The stacks are still standing. No redevelopment project is entitled. And the process that will actually decide what happens to 107 acres of waterfront land is not a corporate deal at all. It's a city planning document that hasn't been rewritten since 1996.
If you're comparing Morro Bay to other Central Coast towns and pricing in "the stacks will be gone soon, the waterfront will open up," that assumption needs an update.
The Deal That Was Supposed to Pay for the Teardown
The pitch made sense on paper. Vistra Corp, the Texas-based energy company that bought the shuttered plant at 1290 Embarcadero, proposed building a 600-megawatt battery energy storage system on a 24-acre slice of the property, tucked into the same footprint where the original plant once stored oil in tanks. In exchange, Vistra would remediate the site, demolish the aging generating building, and take down the three 450-foot concrete stacks that PG&E built in the 1950s and that have loomed over Morro Rock ever since the plant closed for good in 2014.
The city required a companion Master Plan covering the full 107 acres, since state and local planning rules meant any project this size had to come with a vision for the rest of the land. That plan proposed re-zoning the 24-acre battery footprint from Visitor Serving Commercial to a mix of Industrial-General and Industrial-Light, while leaving the remaining acreage under its existing visitor-serving designation. A draft Environmental Impact Report went out for public comment in the spring of 2024. Vistra also had a second path available if local approval stalled: Assembly Bill 205, a 2022 state law that lets qualifying energy projects bypass city councils entirely and go straight to state-level permitting.
Vistra had leverage either way. That's what made the deal feel inevitable to a lot of people watching from the sidelines.
Then, in Writing, It Wasn't
On April 4, 2025, Vistra sent the city a formal withdrawal notice. The letter was short and left little to interpret:
Vistra hereby withdraws its pending application for approvals of a master plan and renewable energy project.
That closed the local process. It didn't necessarily close the state one, since AB 205 was still sitting there as an option. But by November 2025, KSBY reported that Vistra had also stepped back from that route. The company had paused its city application the previous fall specifically to try the state approval process first. Then it stopped pursuing that one too. As one outlet summarized it, the news meant the trio of stacks "may not be coming down after all."
That's the piece that separates this from a normal permitting delay. Vistra didn't lose an approval fight. It walked away from both paths it had available, at the same time.
What's Actually on the Books Right Now
The demolition obligation itself hasn't disappeared. City agreements from 2021 require Vistra to remove the generating building and stacks by a set deadline, or pay the city $3 million instead. Reporting on the exact date isn't consistent, some coverage cites an end-of-2027 deadline, other coverage says 2028, so that detail should be treated as unsettled rather than something to bank on. What's not in dispute is that the stacks were still standing as of mid-2026, and that removing them now depends on whether Vistra chooses demolition, chooses the payment, or something changes about the underlying property before either deadline arrives.
There's another wrinkle that gets less attention than the permitting fight did. Marlys McPherson, who served on the Morro Bay City Council from 2016 to 2020, wrote in the Estero Bay News that PG&E holds deed restrictions covering the entire 107-acre site that bar visitor-serving uses, a liability protection built into the land itself. If that's accurate, it means no city master plan, no ballot measure, and no future buyer's redevelopment pitch can simply override what's written into the title. Anyone with a serious interest in this stretch of waterfront, whether as a homeowner watching the view or an investor eyeing what the site could someday become, is looking at a legal layer that sits underneath the political one.
The Plan Actually Deciding This Now
With the battery project gone, the city shifted its attention to something slower and more foundational: a full rewrite of its Waterfront Master Plan, the guiding document for the harbor and Embarcadero that hasn't been updated since 1996. The city has expanded that plan's boundary to formally include the power plant property and the old sewer treatment plant site, folding the question of "what happens to the stacks and the land under them" into a broader, multi-year vision process rather than a single company's application.
That process is grant-funded and estimated to wrap up in late 2026. Because the Waterfront Master Plan is part of the Local Coastal Program, it has to move through a defined sequence before anything is final:
- Planning Commission review
- City Council adoption
- Certification by the California Coastal Commission
Nothing about the site's eventual use has been decided at any of those stages yet. For a buyer, that means the honest answer to "what's happening with the power plant property" is a timeline measured in planning milestones, not a redevelopment countdown.
Why the Parcel You Pick Matters More Than the Neighborhood
Morro Bay's Embarcadero sits inside the state's mapped coastal hazard area. Walk a few blocks uphill to the bluff-top blocks of downtown, and you're outside it, according to the state's own address-level hazard layer. Most of the city's residential fabric sits above the waterfront to begin with, but that's a description of the town overall, not a guarantee about any specific street or lot. Low ground reaching inland along Morro Creek can map into the hazard zone even where the ocean isn't visible from the property.
| Location type | State coastal hazard mapping | What it means before you write an offer |
|---|---|---|
| Embarcadero-adjacent parcels | Mapped inside the hazard area | Check the parcel directly, don't assume from the street view |
| Bluff-top downtown blocks, a short walk uphill | Mapped outside the hazard area | Similar walkability to the harbor, different mapped status |
| Low ground along Morro Creek | Can map inside the hazard area | Distance from the ocean doesn't rule this out |
The takeaway isn't that one location is better than another. It's that "waterfront adjacent" isn't one category with one price of admission. The state layer is queryable by address, and checking it before you fall in love with a listing costs nothing.
The Market Isn't Waiting on Any of This
Whatever gets decided about the power plant site, buyers and sellers have kept transacting. Over the 30 days ending September 9, 2026, homes in Morro Bay closed at a median $950,000, or $608 per square foot, according to CRMLS data, selling at 97.2% of final list price on average with about 2.9 months of inventory on the market, conditions that still favor sellers. In the seven days ending that same date, four new listings came on the market and 15 homes were pending sale.
That steadiness is itself informative. The stacks-to-storage story generated national headlines for years, yet it hasn't been the thing setting the pace of the local market. Anyone waiting for a redevelopment announcement before making a move here has been waiting through a lot of ordinary transactions closing without one.
One More Thing Worth Checking Before You Buy for Income
If short-term rental income is part of the plan, the city ran a permit audit through 2025 during which no new permits were issued, and only in January 2026 did it authorize a small number of waitlisted properties to move toward permitting. Anyone underwriting rental income on a Morro Bay property should confirm the current cap, the waitlist length, and that specific property's eligibility directly with the city rather than assuming a listing description settles it.
A Working Harbor That's Reinvented Itself Before
None of this is the first time the land under Morro Bay's waterfront has been repurposed. The Embarcadero area was filled and armored between 1942 and 1944 for a Navy amphibious training base, and the T-piers built for that effort are still in commercial use today. The harbor has carried an abalone fishery that peaked in the 1950s, and now carries landings of halibut, sole, and rockfish alongside oyster farms in the back bay. Some residents have voiced concern in local reporting that removing the stacks could shift the character of what's been a working, blue-collar waterfront for generations, not just its skyline.
The land has changed use before. It just hasn't happened on the timeline anyone was told to expect, and right now, nobody, including the company that owns it, is committing to when it happens next.
If you're weighing an Embarcadero-adjacent property against a bluff-top block in downtown Morro Bay, or trying to figure out what the Waterfront Master Plan rewrite might mean for a specific parcel you're watching, Ronca Real Estate can walk the actual hazard mapping and permitting status with you before you write an offer.
