Calpine's Los Esteros Power Plant Begins Simple Cycle Operation Plans Combined Cycle Addition

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Calpine's Los Esteros Critical Energy Facility started commercial operation at the end of February. The Los Esteros Critical Energy Facility (LECEF) is located on Alviso-Milpitas Road in San Jose, California, and will be the first power plant built in San Jose since 1990. It is located on 15 acres near the intersection of Zanker Road and Highway 237, within Santa Clara County.

The plant consists of four 45-megawatt General Electric LM6000 low emission gas-fired simple-cycle turbines with capability of generating 180 megawatts (MW) of electricity. The plant has a contract to operate in simple cycle mode for three years, but probably will switch to combined cycle configuration in 2004. In May of 2003, the company plans to begin installation of combined cycle equipment, adding four Deltak heat recovery steam generators (HRSGs), and two 45-megawatt steam turbines, which will bring total generation up to 270 MW. The total investment value for the project is estimated to be about $250 million.

The plant was built, with two objectives in mind, to supply a dependable source of power to the U.S. DataPort (USDP) facility, and also provide electrical power to the grid in support of the Department of Water Resources (DWR). The U.S. DataPort's Internet Campus facility, scheduled to be constructed on the site adjacent to the Los Esteros plant, is on hold for at least a year due to economic reasons. The state Department of Water Resources signed a contract with Calpine to buy the plant's power during its first three years of operation. The deal is expected to generate $140 million in revenue from 2003 to 2005.

Construction began on the Los Esteros facility in July 2002, but earlier that year, San Jose was sued by the city of Milpitas in an effort to stop construction. The lawsuit alleged that San Jose violated the California Environmental Quality Act guidelines by failing to prepare a proper environmental impact report before approving Calpine's proposal to build the plant. Milpitas officials were concerned about the visual and environmental impacts of the plant, which would be on the city's border and contain four 90-foot high combustion stacks and two 60-foot cooling towers, which would be an eyesore for residents. Calpine has agreed to spend $2 million on architectural improvements and landscaping to help shield the plant. In return, Milpitas dropped the suit.

Los Esteros Critical Energy Facility will be operated by c*Power, a subsidiary of Calpine Corporation (NYSE: CPN) (San Jose, California), one of the nation's leading private energy producer. Calpine is focused on clean, efficient, natural gas-fired generation and the world's largest producer of renewable geothermal energy.