Calpine Signs New Long-Term Power Contracts to Ensure California Continues to Receive Clean, Reliable Power
October 30 2009 - 6:59AM
Business Wire
Calpine Corporation (NYSE:CPN) today announced it has entered
into several new power supply contracts with Pacific Gas and
Electric Company (PG&E). Calpine has executed new contracts to
replace existing contracts it signed with the State of California
during the energy crisis, as well as to increase the supply of
renewable power delivered to PG&E from The Geysers.
In response to the State of California’s program to manage the
energy crisis of 2000-2001, Calpine was the first power company to
enter into long-term contracts with the State and was the first
company to voluntarily renegotiate more favorable terms for the
State. Now, in furtherance of the California Public Utilities
Commission’s and the State’s policy objectives of removing the
California Department of Water Resources (DWR) from its energy
crisis role as the power purchaser of last resort, Calpine and
PG&E have finalized contracts to replace two of these DWR
contracts to ensure ratepayers continue to enjoy the benefits of
Calpine’s clean, reliable, cost-effective and well-located power
facilities. As part of this negotiation, Calpine and PG&E have
agreed to upgrade the Los Esteros Critical Energy Facility, located
in Silicon Valley, to operate in combined-cycle mode at an
increased capacity and higher efficiency.
“Through these agreements Calpine is very pleased to assist
PG&E in serving the changing generation needs in California,”
said Calpine President and Chief Executive Officer Jack A. Fusco.
“We welcome the opportunity to work with PG&E to supply both
incremental renewable power and flexible and reliable natural
gas-fired generation necessary to integrate intermittent renewable
energy supplies coming on-line in furtherance of the State of
California’s 33 percent renewable goal.”
These following agreements will be submitted to the California
Public Utilities Commission by PG&E for approval:
Extension of Calpine Northern California Peaking Power Plant
Contract
Calpine’s 11 peaking units, providing approximately 500
megawatts (MW), are highly dispatchable, reliable and are well
located in Northern California. These power plants, which came
on-line in 2002 and 2003, were under a power purchase agreement
with the DWR which was due to expire in mid-2011. Calpine and
PG&E have entered into a replacement contract whereby PG&E
will enjoy greater dispatch flexibility for all 11 units through
2017 and for the seven Bay Area units through 2021.
Upgrade of the Los Esteros Critical Energy Facility
The Los Esteros Critical Energy Facility (LECEF), located in San
Jose, California, was constructed and placed in operation by
Calpine in 2003 pursuant to a power purchase agreement with DWR. In
connection with the novation of the existing DWR contract, which
will expire at the end of 2012, Calpine and PG&E have
negotiated a new agreement to facilitate an upgrade of LECEF from a
180 MW simple-cycle generation facility to a 300 MW (289 MW July
peak) combined-cycle generation facility. In addition to the
increase in capacity, the upgrade project will increase the
efficiency and environmental performance of the plant by
significantly lowering the heat rate.
Extension and Expansion of PG&E’s Contract for Renewable
Power from Calpine’s Geysers Geothermal Facility
Calpine and PG&E have agreed to a significant extension of
the term and an increase in the volume under the existing contracts
for delivery of electricity from The Geysers geothermal facility.
Calpine currently provides PG&E a total of 375 MW of power
under two contracts through 2012 and 2014. The parties have agreed
to increase the volume to 425 MW through 2017. From 2018 through
the end of 2021, Calpine will supply PG&E 250 MW of renewable
energy from The Geysers.
The extension and increases in volume under these new contracts
will not only assist PG&E in meeting its renewable goals, but
will provide Calpine with the resources required to continue its
efforts to maintain and increase the energy output from The
Geysers, the largest geothermal facility in the United States.
Calpine’s Commitment to California
Calpine remains committed to California by providing clean,
efficient, and renewable power generation. With 5,800 megawatts in
operation, including the newly commissioned, state-of-the-art 600
MW Otay Mesa Energy Center in San Diego, additional development
projects include the 600 MW Russell City Energy Center in Hayward,
scheduled to be operational in 2012, the Los Esteros Critical
Energy Center upgrade project discussed above and continuing
expansion at The Geysers.
About Calpine
Calpine Corporation is helping meet the needs of an economy that
demands more and cleaner sources of electricity. Founded in 1984,
Calpine is a major U.S. power company, currently capable of
delivering nearly 25,000 megawatts of clean, cost-effective,
reliable and fuel-efficient electricity to customers and
communities in 16 states in the United States and Canada. Calpine
owns, leases, and operates low-carbon, natural gas-fired, and
renewable geothermal power plants. Using advanced technologies,
Calpine generates electricity in a reliable and environmentally
responsible manner for the customers and communities it serves.
Please visit www.calpine.com for more information.
Forward-Looking Information
In addition to historical information, this release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Words such as
"believe," "intend," "expect," "anticipate," "plan," "may," "will"
and similar expressions identify forward-looking statements. Such
statements include, among others, those concerning expected
financial performance and strategic and operational plans, as well
as assumptions, expectations, predictions, intentions or beliefs
about future events. You are cautioned that any such
forward-looking statements are not guarantees of future performance
and that a number of risks and uncertainties could cause actual
results to differ materially from those anticipated in the
forward-looking statements. Please see the risks identified in this
release or in Calpine's reports and registration statements filed
with the Securities and Exchange Commission, including, without
limitation, the risk factors identified in its Annual Report on
Form 10-K for the year ended December 31, 2008. These filings are
available by visiting the Securities and Exchange Commission's web
site at www.sec.gov or Calpine's web site at www.calpine.com.
Actual results or developments may differ materially from the
expectations expressed or implied in the forward-looking
statements, and Calpine undertakes no obligation to update any such
statements.
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