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California Energy Commission approves construction of Otay Mesa generating plant

SAN FRANCISCO, Calif., April 18, 2001 — PG&E Corporation’s National Energy Group (NEG) announced today that the California Energy Commission (CEC) has approved construction of the Otay Mesa Generating Plant in San Diego County, which the NEG has developed.

In a regular business session Wednesday, the CEC voted unanimously to approve a license for the 500-megawatt project.

“We are very grateful for the commission’s action on this project,” said Thomas B. King, president and COO of the NEG’s West Region.

As the project developer, the NEG has overseen the licensing process for the proposed power plant. Once the CEC process is complete, Calpine Corporation will assume ownership of the Otay Mesa Project and will construct and operate the plant. The NEG will contract for up to 250 megawatts of the project’s output available upon commercial operation.

The Otay Mesa Project has had support from the San Diego community.

The Otay Mesa Generating Project will be located within a 46-acre property on the eastern portion of Otay Mesa, near the base of the San Ysidro Mountains, approximately 1.5 miles from the United States/Mexico border. The county has targeted this area for development of a technology park, and construction of the Otay Mesa Plant will aid in establishing infrastructure necessary to support that development plan.

The project, which is expected to begin construction in the third quarter of this year, will produce enough electricity to power approximately 500,000 homes.

Designed as an efficient, combined-cycle generating plant, the Otay Mesa facility will be fueled with natural gas and include emission control equipment and water conservation technology. In addition, the Otay Mesa Generating Project will utilize mobile emission reduction credits to offset emissions from the plant. A large portion of the mobile credits will be created through the conversion of refuse-hauling vehicles in San Diego to be fueled by natural gas.