SPENCER MICHELS: On 20 acres of undeveloped grazing land, a dozen miles south of downtown San Jose, California, one of the state's largest energy companies, Calpine, wants to build a 600-megawatt electric power plant. It would be the only major plant in the Silicon Valley, a voracious consumer of electricity in an era of scarcity, an era when some politicians and economists say the long-term solution is more power plants. Both President Bush and Vice President Cheney have quoted the same statistics:
PRESIDENT GEORGE W. BUSH: The Department of Energy estimates that America will need between 1,300 and 1,900 new power plants over the next two decades.
VICE PRESIDENT DICK CHENEY: That averages out to more than one new power plant per week every week for the next 20 years.
SPENCER MICHELS: In the past decade California has had to get by with old power plants or with power bought from out of state. No major power plants were built in California for a dozen years. No one expected the huge increase in demand and generating companies were reluctant to build, given the uncertain regulatory climate under deregulation. Now, with demand soaring and rolling power blackouts convincing many residents of the need for more power, 15 new big plants, plus several smaller ones, have been approved, and some are already under construction.
Calpine says its proposed San Jose plant, called Metcalf, would supply enough power for 600,000 homes and would be more efficient and less polluting than existing plants, and it's located where it's needed. In Silicon Valley the demands for power are growing fast. Server farms, buildings packed with computer equipment that serves the Internet, use up to 20 more times electricity than conventional offices. Peter Cartwright, Calpine's CEO, argues that Metcalf plus three other plants his firm is building are important to the state's economic health since electricity demand is rising 4 percent a year.
PETER CARTWRIGHT: Silicon Valley, as everybody knows, is well aware - is one of the fastest growing demand centers in the state, and we have very - hardly any power generated in this area. Metcalf is really ideally suited; it's right at a large PG&E substation, so we can get power directly into San Jose and Silicon Valley.
SPENCER MICHELS: But three miles away from the Metcalf site some residents have been saying the new plant won't help the energy crisis and will, in fact, harm them. In addition, high-tech manufacturer, Cisco, which has plans to build a campus with 20,000 employees near the Metcalf site, has opposed the power plant, saying it should be located elsewhere. Last November, residents and Cisco successfully lobbied the San Jose city council not to allow the plant.
SPOKESMAN: Opponents of the Calpine proposal please stand.
SPENCER MICHELS: Among the arguments - that the plant will pollute the air.
ELIZABETH CORD: The power plant would be the number one most stationary source of emissions in the city of San Jose both for nox emissions and particulate matter.
TIM ALTON: If Calpine is approved for Coyote Valley, it is unlikely that Cisco and other prestigious high tech companies will spend tens of millions of dollars in an area blighted by a power plant.
SPENCER MICHELS: The city council and the mayor listened and voted to turn down the Calpine plant. Normally, that would have been final, but Calpine has taken the issue to the state energy commission, which can reconsider it. Elizabeth Cord helped organize her neighbors against the plant, and she thinks they should have the final word.
ELIZABETH CORD: We already live in an area that's highly impacted for air pollution, so it's really going to be a very significant impact; the particulate matter alone, the emissions from the project, are going to bring this area to over 247 percent of the clean air standards, so that's over twice what the maximum level is supposed to be; we're very concerned about that.
SPENCER MICHELS: But state officials faced with tremendous pressure to alleviate the shortage of energy appear ready to override the local decision. The state's recently appointed energy czar, Richard Sklar, says the objections are another case of the not-in-my-backyard syndrome, NIMBY, as it's called.
RICHARD SKLAR: Spencer, Spencer, NIMBY, NIMBY, NIMBY, you and I have watched this for years. If you're going to need energy, if you're going to create waste someone's got to live with it. The new plants, yes, they are not something you'd like to have; you'd rather have Golden Gate Park next to you, but you can't. We've got to get some new power plants because California is most marginal in terms of the balance between supply and demand. We've not built plants for a number of years.
SPENCER MICHELS: One of Sklar's jobs is to ease the permitting process for new power plants. And Metcalf was one of his first assignments.
RICHARD SKLAR: It will be one of the most modern plants in the country in terms of pollution control, not perfect but not bad, and it's not going to be sitting in someone's backyard; it's in their general vicinity; it's a long industrial highway.
SPENCER MICHELS: Dan Kalb heads the local branch of the Sierra Club. In the energy crisis even his group has endorsed the Metcalf site.
DAN KALB: We are strong proponents of again wind, solar, and other renewable energy sources, and we will continue to make that our top priority, but the construction of fossil fuel plants, natural gas plants, done in an appropriate fashion, constructed in state of the art technology, actually can help reduce our energy demand and reduce the need to drill for oil, for example, or harm the environment in some other way.
SPENCER MICHELS: Local officials have felt the heat from the Sierra Club and from the state and recently dropped their opposition to the Calpine plant. But city councilman Forrest Williams remains opposed to the site, which is in his district.
FORREST WILLAMS: We've been feeling a lot of pressure. Everyone, even in the legislatures to our governor, to our senator, even all the way up to Cheney have a sense that we should be responsible, that we should go ahead and okay the plant.
SPENCER MICHELS: Neighborhood activist Cord also resents the interference.
ELIZABETH CORD: There's been really a tremendous amount of political pressure. The state legislators who are trying to pressure in favor of this project are the ones who brought us deregulation. Unfortunately, it's been a tremendous debacle and it looks really bad for them, and I guess they're trying to make it look like they're fixing the situation. Metcalf won't fix anything; it won't have any impact on current shortages.
SPENCER MICHELS: Those shortages prompted Vice President Cheney's insistence that at least 1,300 new power plants are needed. California energy czar Sklar favors building Metcalf, but he disagrees with the Vice President's figures.
RICHARD SKLAR: He's ill informed. I'm certain that his intent is good so he must be ill informed, because he's wrong.
SPENCER MICHELS: Why is he wrong?
RICHARD SKLAR: Because, as his own laboratories have said, conservation will do more for it than building new plants. We don't need that level of new plants, and if we do, a lot of them will replace existing, less efficient plants.
SPENCER MICHELS: Other Californians say all those new plants are not needed because there already is plenty of electricity. The problem, they say, is that it's being withheld by generators trying to push prices up. Mike Boyd heads Californians for Renewable Energy.
MIKE BOYD: There's more than enough supply here; it's just a matter of getting the power plants turned on and running.
SPENCER MICHELS: What do you mean there's more than enough supply? We've been hearing for a year now that there isn't enough supply; they need to build new ones.
MIKE BOYD: Well, you've been hearing that for about a year now because that's about how long they've been holding back power. If you look at this power plant behind me, you'll see that it doesn't look like it's running to me, and if we're in a crisis, why isn't this plant running?
PETER CARTWRIGHT: Have people held back power? I don't know; we haven't. We're operating more than they used to operate in the past.
SPENCER MICHELS: Right. But the general concept that maybe we do have enough power, that this is a artificial kind of a shortage that we're having right now.
PETER CARTWRIGHT: I don't believe that. I don't think that's true.
SPENCER MICHELS: This year, the number of megawatts statewide that were out of service for maintenance was more than three times last year's number. State agencies are currently investigating whether or not energy producers deliberately withheld power to inflate prices.
GOV. GRAY DAVIS: There's evidence that some generators may be withholding electricity from the California grid to create artificial scarcity, which in turn drives up the price astronomically.
SPENCER MICHELS: Allegations that some producers have withheld power and have made exorbitant profits have led to calls for the state to take over some private power plants. A new law creating a public power authority allows that, but plant owners, like Calpine's Cartwright, are appalled.
SPENCER MICHELS: What about the state getting into the power business the way it is, for example, in France?
PETER CARTWRIGHT: Or in Russia, or in Cuba. I think these are examples of state-owned power that have not been successful. I don't think there's any need for the state to come in, and my understanding in talking to people in Sacramento is that there is no real intention to get in if private enterprise builds enough power plants to get the system in balance. So I don't think they should and I don't think they will.
SPENCER MICHELS: Cartwright is so confident of California's need for more power and its reliance on private companies that he plans to build enough capacity in the next five years to supply 12 million homes. And Calpine is pushing ahead with plans for its San Jose plant, confident it will be approved, as will plenty of others in the current political atmosphere.
JIM LEHRER: And the San Jose City Council is meeting this evening and is expected to take a new vote on that power plant.