HAYWARD - By Matt O'Brien

The City Council unanimously voted Tuesday night to let Calpine Corp. carve out 12 acres of city-owned land so the company can build a 600-megawatt power plant. City Councilman Olden Henson said he was "delighted" to welcome the San Jose-based energy producer back to Hayward several years after Calpine's nearly identical plans for a 12-story power plant by the shoreline fizzled.

"The (energy) crisis has not gone away," Henson said, citing the power outage that struck downtown Los Angeles on Tuesday morning.

"As the state grows, we're going to need more and more power," Henson said.

The natural gas-fired plant, if built, would produce electricity for about 600,000 customers now served by distant plants, some of them decades old, said Calpine development director Mike Hatfield.

Power would be routed to a nearby PG&E substation along the Hayward shoreline, serving both sides of the Bay with the help of expanded power lines along the Hayward-San Mateo Bridge.

The only power plants on the Peninsula are now two failing, decades-old plants in San Francisco.

Calpine recently built a new 600megawatt plant in San Jose that opened in the spring.

The company originally proposed building its Hayward plant in 2001, during the height of the California energy crisis. But after obtaining a license to build the plant from the California Energy Commission in 2002, Calpine watched its plans peter out as the economy tumbled. The company eventually lost its opportunity to build on the shoreline site it had spent two years garnering support for.

The site, on Enterprise Avenue adjacent to Hayward's wastewater plant, is controlled by a radio network that has no plans to move.

In order to get approval to build a plant — named the Russell City Energy Center — Calpine must now return to the California Energy Commission to acquire a new license.

The company must also demonstrate enough evidence to convince an electricity provider to provide financing for the project.

But now the company, as a result of the city council's vote Tuesday, has a new plot of land where it can build the plant.

If Calpine settles its financing agreement, the city has agreed to trade 12 acres next to the wastewater treatment plant in exchange for a 10-acre piece of property nearby.

The power plant will use 4 million gallons a day of the city's 16 million gallons a day of treated wastewater.

The recycled water would be used as a coolant to make the plant's energy generation process more efficient, Hatfield told the council.

Calpine, which in 2001 promised to give the city $15 million to help build a library along with other donations for the area, can now only afford promising $10 million for the library.

Mayor Roberta Cooper said she hoped the $10 million amount would be "the least" the company gives, asking Calpine to consider offering more later.

Calpine representatives also said they have dropped their plans to conceal the plant with a large steel structure shaped like a wave.

Although some local residents and officials wanted the "wave" to help hide the plant from commuters on nearby Route 92, others believed the structure would look like a "chicken coop."

In other business Tuesday night, the council unanimously voted to raise sewer rates and connection fees citywide to help pay for a $57 million upgrade of the wastewater treatment plant.