Calpine Agrees to Sell 25% Undivided Interest in Freestone Energy Center to Rayburn Country Electric Cooperative
October 29 2010 - 1:42PM
Business Wire
Calpine Corporation (NYSE:CPN) has signed an agreement to sell a
25% undivided interest in the 1,038 MW Freestone Energy Center to
Rayburn Country Electric Cooperative Inc. (Rayburn) for $215
million. The combined-cycle natural gas-fired power plant is
located near Fairfield, Texas, in the North Zone of ERCOT.
Calpine, which remains the majority owner, will continue to
operate the plant and in exchange will receive annual operating and
management fees from Rayburn. Rayburn will receive 25% of the
economic benefit of the plant’s output, enabling it to better serve
its customers in rural north and east Texas. The agreement is
subject to regulatory agency approval and is expected to close in
December of this year.
“We are pleased to have Rayburn Country as a partner and
look forward to helping them to serve their customers with
reliable, cost-effective and environmentally responsible power from
the Freestone plant,” said Calpine Executive Vice President and
Chief Commercial Officer Thad Hill. “For Calpine, this transaction
demonstrates our ability to be opportunistic and creative in
unlocking embedded value in our portfolio to enhance liquidity and
give us greater capital flexibility, all toward the end of
improving shareholder value.”
Freestone Energy Center, which began commercial operation in
June 2002, is a natural gas-fired combined-cycle facility. In 2009,
it earned Bronze Member status in the Texas Commission on
Environmental Quality’s Clean Texas Program. Using advanced
technology, the Freestone plant generates power first via four
electricity-producing natural gas turbines. Then it uses heat from
that process to create steam that drives two steam turbines. This
highly fuel-efficient approach allows Calpine to dramatically
reduce emissions compared to older fossil-fuel facilities. A
combined-cycle facility consumes about 40 percent less natural gas
per megawatt-hour-produced than older technology plants, making it
a cost-effective and low-carbon source of electricity.
“Rayburn has been exploring options to purchase an ownership in
an electric generation plant in the north Texas area for several
years,” said Rayburn President and CEO John Kirkland. “The
Freestone Energy Center is a perfect size and generation match to
Rayburn’s load and we feel very fortunate to partner with a company
like Calpine, which demonstrates a high degree of professionalism
and generation expertise.” Kirkland also stated that, “Rayburn and
its member systems are looking forward to working together with
Calpine to supply our members with power from this plant for many
years in the future.”
About Rayburn Country Electric Cooperative
Headquartered in Rockwall, Texas, Rayburn is a rural electric
generation and transmission cooperative which provides the
wholesale power requirements for five rural electric distribution
cooperatives. Rayburn’s member cooperatives include Fannin County
Electric Cooperative Inc., Farmers Electric Cooperative Inc.,
Grayson-Collin Electric Cooperative Inc., Lamar County Electric
Cooperative Association and Trinity Valley Electric Cooperative
Inc., which together provide electric service in sixteen counties
in North Central and Northeast Texas.
About Calpine
Founded in 1984, Calpine Corporation is a major U.S. power
company, currently capable of delivering nearly 29,000 megawatts of
clean, cost-effective, reliable and fuel-efficient power from its
93 operating plants to customers and communities in 21 U.S. states
and Canada. Calpine Corporation is committed to helping meet the
needs of an economy that demands more and cleaner sources of
electricity. Calpine owns, leases and operates low-carbon, natural
gas-fired and renewable geothermal power plants. Using advanced
technologies, Calpine generates power in a reliable and
environmentally responsible manner for the customers and
communities it serves. Please visit our website at 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 Dec. 31, 2009, and its Quarterly
Report on Form 10-Q for the quarter ended September 30, 2010. These
filings are available by visiting the Securities and Exchange
Commission’s website at www.sec.gov or Calpine’s website 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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