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Industry News

California Finally Approves Metcalf Power Plant

LCG, Sept. 25, 2001--It took two and one-half years, but the California Energy Commission finally granted approval to plans by Calpine Corp. to build a 600 megawatt power plant where one is needed most -- in Silicon Valley, where everything associated with computers has sent demand for electricity soaring.

The regulators said yesterday in a statement "By a 5 to 0 vote, the California Energy Commission today gave the Metcalf Energy Center final approval for construction and operation."

The natural gas-fueled, combined-cycle plant will be built in an undeveloped area just south of San Jose, known as Coyote Valley. The estimated cost of the project, which will be built by San Francisco-based Bechtel Enterprises, is $350 million.

Bechtel said it would begin construction in the middle of October and the project would take about two years to complete.

Metcalf's road to approval was a bumpy one, which the regulators characterized as "perhaps the most contested power plant proposal in the California Energy Commission's siting experience."

Coyote Valley is out past the junk yards and drive-in movies in a rural area once given over to orchards and grazing livestock, but as soon as the power plant was announced it suddenly became almost an urban area.

San Jose's largest employer, Cisco Systems, said the facility would be incompatible with a new "campus" it was planning to build nearby that would provide space for 20,000 employees. Populist advocates opposed the plant on behalf of people who live in a tract home development a couple of miles away.

San Jose Mayor Ron Gonzales and his entire City Council opposed the plant, perhaps taking their cue from Cisco.

Project manager Ken Abreu said "We have always believed this is an ideal location for a plant, in a region without its own local source of significant power generation," and other Silicon Valley companies went on record as saying the power Metcalf would produce was needed.

"We are looking forward to working together with the city as we begin construction on the first major power plant to be built in Silicon Valley," he added.

The Metcalf plant had the support of every major environmental and health organization, including the Sierra Club and the American Lung Association, and as California's power crisis deepened earlier this year Gov. Gray Davis and members of the state legislature weighed in with their support for the project.

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