State regulators have blessed a major overhaul of San José’s electric backbone without tearing into one of South San José’s last big stretches of open land. The California Public Utilities Commission has approved a plan that shifts a controversial converter station off the Coyote Valley floor and onto PG&E’s existing Metcalf substation, while greenlighting new underground transmission to move big amounts of power from the south side to downtown. Construction is expected to start this year, with officials targeting 2028 for the new hardware to be online.
As reported by ABC7, the move keeps Coyote Valley’s open space intact by shifting the southern terminal to PG&E’s Metcalf substation on Monterey Road. The commission’s proposed decision grants LS Power a certificate of public convenience and necessity and certifies the project’s environmental review. The full decision and environmental documents are posted by the California Public Utilities Commission.
What the project builds
The Power Santa Clara Valley Project centers on two high-voltage converter terminals, a roughly 13-mile HVDC underground cable between a southern Grove terminal and a downtown Skyline terminal, plus short AC connections into existing substations. Power the Bay and regulatory filings describe an added underground link to the Metcalf area so the system can tap into PG&E’s equipment there. The California ISO chose LS Power to build the San José-area HVDC lines, providing the regional reliability justification through its transmission planning process.
Why the Metcalf move matters
Local conservation advocates and the Santa Clara Valley Open Space Authority pushed hard for the Metcalf shift because it protects planned wildlife crossings and working farmland in Coyote Valley. The authority says it negotiated agreements with LS Power and PG&E to co-locate the terminal at Metcalf to safeguard habitat and avoid building on prime agricultural land, calling the valley one of our last spaces. PG&E has told reporters that using an existing substation site avoids new impacts and speeds the project timeline, and LS Power officials told ABC7 the new line could deliver roughly enough capacity to power 750,000 new homes.
Local reaction and next steps
The City of San José has set a public hearing for March 24, 2026, to consider a franchise agreement that would allow LS Power to run transmission within the city's public rights-of-way. Meeting materials are listed in the City of San José City Council agenda. Environmental groups had previously objected when an orchard parcel in Coyote Valley was floated as a site, warning that turning farmland into a large electrical complex could damage wildlife, heighten fire risk and fragment habitat, as reported by San José Spotlight.
Broader coverage has tied the grid upgrades to San José’s push to attract big data centers and industrial projects, along with PG&E’s commitments to bolster South Bay infrastructure. Local officials say that combination makes the schedule feel urgent, according to reporting from KQED.
Legal and cost details
The CPUC’s proposed decision sets a maximum cost cap of roughly $1.59 billion and requires LS Power to carry out mitigation, monitoring and safety measures as part of certifying the final environmental impact report, according to commission filings and legal summaries. Energy-sector watchers note that the decision closes the CPCN proceeding while tying the project’s go-ahead to agreed monitoring plans and specific regulatory waivers, all intended to keep construction on track in the 2026 to 2028 window.
The result is a rare local trade-off that many can live with: San José gets a major boost in electric capacity while leaving intact a corridor that conservationists have spent years fighting to protect. Residents and advocates will want to keep an eye on the March 24 council hearing, upcoming CPUC compliance filings and the city’s encroachment-permit documents for the fine print on mitigation, construction timing and public access around nearby preserves.
