Silicon Valley business group backs California power plant

SAN FRANCISCO: A Silicon Valley business group urged the San Jose City
Council on Monday to reconsider its decision to reject a controversial plan to
build a power plant in the heart of the high-technology area.

"In light of the current energy crisis, which severely impacts all
businesses throughout Silicon Valley, it is time for the city council to
reconsider its decision to deny approval for the power plant in Coyote
Valley," Steve Tedesco, president of the San Jose Silicon Valley Chamber of
Commerce, said in a statement.

California has been hit with soaring power prices and blackouts as its aging
power grid struggles to keep pace with a booming economy and rapidly growing
population. No new power plants have been built in the state for the past 10
years.

In late November, the San Jose City Council unanimously voted to deny a
request to change its zoning regulations to allow the 600-megawatt, natural gas
fired Metcalf Energy Center to be built in south San Jose.

The proposed plant, which is being jointly developed by San Jose-based
Calpine Corp. and San Francisco-based Bechtel Enterprises Holdings, Inc., would
provide enough electricity to power around 600,000 homes.

It is slated to come online in the spring of 2003 at a cost of $300 million
to $400 million.

San Jose-based computer networking giant Cisco Systems Inc. , the largest
employer in San Jose, has sharply opposed the Metcalf project. It plans to build
an office complex near the plant for 20,000 employees and is worried about the
plant's possible health and safety effects.

The action by the Silicon Valley Chamber of Commerce, which represents 2,000
member businesses, came after a resolution adopted unanimously by its board.
Tedesco cited two major concerns of the chamber.

First, at the time of the November hearings, council members were told by
city staff that there was no reason to construct more power plants in the state.
"If the council's decision was based on this kind of information, the need
to reconsider that decision is absolutely essential," he said.

Second, Tedesco referred to "growing pressure" to force the
California Energy Commission to override the city council and locate the plant
in San Jose anyway.

David Vossbrink, spokesman for San Jose Mayor Ron Gonzales, a fierce opponent
of the project, said the decision is now in the hands of the energy commission,
the state's primary energy policy and planning agency.

A spokesman for the commission, which is conducting public hearings on the
matter through March and expects to propose a decision in spring, would not
comment on the organization's position.

Although the commission has the authority to overrule the city council's
vote, it has only overruled a local zoning vote twice in the past. "It was
quite a while ago, maybe 10 or 15 years ago," a commission spokesman said.

Within the last two years, the commission has approved the construction of
nine power plants, five of which are under construction. Fourteen power
projects, including two small power plants, are currently before the commission.

Supporters of the San Jose plant also include the local chapter of the
American Lung Association and the Loma Prieta chapter of the Sierra Club.

(C) Reuters Limited 2001.