July 21, 2005


Calpine, San Jose working to iron out their differences

By Shari Kaplan
Staff Writer

Calpine Corporation, which owns South San Jose’s 600-megawatt Metcalf Energy Center (MEC) that came online in June, is working with the city of San Jose to resolve what some people feel are unresolved problems.

According to San Jose City Councilmember Forrest Williams, in whose District 2 MEC is located, some local businesses feel slighted that they won’t receive the reduced-cost power assessment they thought they’d be getting per a 2001 co-operative agreement between Calpine and the city.

In the text of the agreement was language that said Calpine (in 2001 called Calpine/Bechtel) would make available “competitive long-term contracts for power exclusively to San Jose businesses on terms and conditions that are at least as favorable as generally offered to other users.” This window of opportunity would last for three months, to be jointly agreed upon by the city and Calpine.

Although the San Jose City Council originally was against MEC’s existence at all, the “energy crisis” in 2001 and 2002 caused them to re-consider, as did then-Governor Gray Davis’ strong recommendation for building another San Jose power plant. When the council changed its stance, Williams was the only member not to. He said he still wasn’t convinced the plant was necessary, but obviously the majority opinion ruled.

And so he has become a watchdog, patiently monitoring each step of MEC’s construction process and encouraging South San Jose residents to keep him apprised of any concerns, such as when MEC underwent test-firings this spring and generated a large plume.

It turned out the plume was simply steam. It appeared because MEC had intentionally disabled its plume abatement system, only temporarily, to see how noticeable the plume might be. The type of plume residents saw during test-firings will not occur now that the plant is fully operational, according to MEC spokeswoman Lisa Poelle.
Calpine is also trying to address the city’s concerns relating to the 2001 co-op agreement, particularly those expressed by Williams.

“The economic benefits for us locally were part of our agreement,” Williams said. “I’m not particularly happy that we’re not able to get local consideration for our local companies, but the rules have changed, so we’re following through.”

Poelle said Calpine is trying to follow through as well and is not trying to go back on its word in any way.
“Essentially, the intention was that Calpine would help the city focus their message on energy availability and accompany them in some meetings with San Jose businesses to promote the city as a good place to do business,” she explained.

“They wanted Calpine to join them in a targeted marketing effort to show businesses that there’s a company right here with a reliable source of energy, to make it easy for companies to arrange to get into contracts for their specific needs,” she added.

“Our co-op agreement was written in the spring of 2001, but the regulations governing this kind of activity were altered in September 2001. Now, unfortunately, only companies that are already engaged in ‘direct access’ relationships for their energy are eligible for this kind of contract. To the extent that there are existing, qualifying businesses that could benefit from this provision, Calpine and the city will work together,” Poelle said.

Williams, who has already begun meeting with Calpine’s legal team on this issue, said he also has another concern about MEC—this one not city-wide, but brought up by some District 2 constituents. They felt MEC’s nighttime lighting was too bright and wondered when, or if, its architectural and landscaping screening projects would be completed.

According to Poelle, MEC’s lighting design has long since been reviewed and approved by the California Energy Commission. The architectural screening project is scheduled for completion in August. It will comprise a nearly 100-foot wall with a facade resembling that of an office complex.

Although power plants are usually not required to screen like this, especially in rural areas like MEC’s, Poelle said Calpine is doing it anyway. Trees and other landscaping will also be planted to help “green” MEC’s portion of Monterey Road.

For more information about the Metcalf Energy Center, including fact sheets, regulatory information and links to news articles, visit www.metcalfenergycenter.com on the Internet. Information is also available by calling (408) 463-8008.