The U.S. Environmental Protection Agency (EPA) today cleared the
way for a federal air permit to allow Calpine Corporation
(NYSE:CPN) through its project subsidiary to build the 600-megawatt
Russell City Energy Center in Hayward, California. The EPA’s
Environmental Appeals Board (EAB) denied all remaining appeals of
the federal air permit issued February 4 by the Bay Area Air
Quality Management District (BAAQMD) for the project. The Russell
City Energy Center previously received its Notice to Proceed from
the California Energy Commission (CEC) on August 26.
“The Russell City Energy Center will set a new standard for
highly efficient natural gas-fired power plants that will reliably
meet our nation’s power needs while dramatically reducing
greenhouse gas emissions,” said Jack Fusco, president and chief
executive officer of Calpine. “We are pleased by today’s
decision and look forward to beginning construction which in turn
will bring significant economic benefit to the City of Hayward and
the broader Bay Area.”
“Just as California is serving as a model for the rest of the
nation in enacting ambitious policies to reduce our emissions and
grow our green economy, projects like this one are also leading the
way in the transition toward a cleaner, more sustainable future,”
said California Governor Arnold Schwarzenegger. “I want
to congratulate Calpine on this project which will not only help us
meet our energy needs while producing fewer emissions, but will
also create jobs when we need them the most.”
The BAAQMD considered significant public input from community
and environmental groups, including the Sierra Club, before issuing
Russell City’s Prevention of Significant Deterioration Permit
(PSD), the first of its kind to impose limits on a power plant’s
emissions of greenhouse gases.
“New cleaner burning power plants will allow the phase out of
dirtier, less efficient power plants,” said Jack Broadbent,
executive officer of the BAAQMD. “The Russell City Energy
Center will have very tight emission limits and be the first in the
country to limit greenhouse gas emissions.”
Calpine, through its project subsidiary, agreed to include these
unprecedented limits on pollutants linked to global warming in the
permit more than a year before such limits will be required by the
EPA. Greenhouse gas limits will be required in air quality permits
for similar projects beginning in January 2011.
“All the parties that worked so constructively to make this
happen – including Calpine, the CEC and the Bay Area Air Quality
Management District, as well as the local governments, unions and
environmental organizations – should be commended for their
successful collaboration. The Russell City project demonstrates
that the proven and powerful tool of the federal Clean Air Act can
be applied to help reduce dangerous global warming pollution,”
said California Air Resources Chairman Mary D. Nichols.
“These federal Clean Air Act rules offer a common-sense,
cost-effective tool to ensure that owners of the new industrial
facilities that will be with us for decades invest in the cleanest
technologies possible now.”
“Carbon emissions have clearly emerged as a critical indicator
of environmental performance for power plants, and we commend
Calpine for acknowledging as much by securing the first
plant-specific mandatory limits on greenhouse gas emissions,” said
Ralph Cavanagh, Energy Program Co-Director for the Natural
Resources Defense Council. “We look forward to the
not-too-distant day when all power plants will operate under
greenhouse gas performance standards.”
Under development since 2001, the Russell City plant will use
the most advanced emissions control technology available today for
a natural gas-fired power plant. It will be designed to operate in
a way that produces 50 percent fewer greenhouse gas emissions than
the most advanced coal-fired plants and 25 percent fewer than the
standard set by the California Public Utilities Commission (CPUC).
The facility is expected to play a critical role in meeting the Bay
Area’s power needs as older, emissions-intensive plants shut down
and in supporting the growing integration of new renewable projects
in California.
“Bringing Russell City Energy Center online is good for Hayward
and better for the environment,” said Hayward City Councilmember
Bill Quirk. “The alternative to the electricity produced by
Russell City is importing coal-generated power from out of state.
Coal produces nearly twice the greenhouse gases and ten times more
pollution than natural gas.”
In addition to protecting air quality, the plant will conserve
water resources by using reclaimed wastewater from the City of
Hayward’s Water Pollution Control Facility for all cooling and
boiler makeup. This environmentally responsible process will
prevent up to four million gallons of wastewater from being
discharged into San Francisco Bay each day.
“The Russell City Energy Center will be a magnet for bringing
new business to Hayward, as well as assuring the supply of power
for existing businesses,” said Kim Huggett, president and CEO of
the Hayward Chamber of Commerce. “The project is expected to
generate millions of dollars in benefits, including tax revenue,
job creation and contributions to our community that will improve
the quality of life for Hayward residents.”
The plant will generate approximately $30 million initially in
one-time tax revenue, followed by recurring property tax revenues
of more than $5 million annually to help fund local government
services.
“We are looking forward to constructing the Russell City Energy
Center project and putting people back to work in the Bay Area,”
said Andreas Cluver, secretary-treasurer of the Alameda County
Building Trades Council. “Building this efficient, natural gas
power plant means 650 union construction jobs in Hayward at a time
we need it most.”
In addition, the Russell City Energy Company LLC (RCEC) will
donate $10 million to help build a new library for Hayward. RCEC
also reached an agreement in June with the East Bay Regional Park
District that finalized the details of approximately $1.6 million
in contributions of land and funds for conservation and
improvements to the Hayward Regional Shoreline.
Pacific Gas & Electric will purchase the full output of
electricity from Russell City and will supply natural gas to the
plant under an amended power purchase agreement approved by the
CPUC in September 2010. The agreement was supported by the
Department of Ratepayer Advocates, the Utility Reform Network and
California Unions for Reliable Energy.
The Russell City project is jointly owned by Calpine
Corporation, which holds a 65 percent equity interest and serves as
development manager, and an affiliate of GE Energy Financial
Services, which holds a 35 percent equity interest. The plant is
expected to begin commercial operation in June 2013.
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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