Sempra Energy (SRE) unit San Diego Gas & Electric Co. said Wednesday it signed a contract with Calpine Corp. (CPN) to buy 25 megawatts of geothermal power over four years.

The power will be generated at Calpine's geothermal power plants at The Geysers facility in northern California. SDG&E needs the power to comply with California renewable energy requirements.

The state requires utilities to use renewable sources for one-fifth of the power they sell by the end of this year, with the mandate expanding to one-third renewables by 2020. The requirements are part of the state's 2006 plan to combat climate change.

Terms of the contract were not disclosed.

Shares of Sempra recently traded 7 cents lower at $50.19; Calpine shares were 13 cents lower at $11.94.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com
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