Calpine, GE Receive California Public Utilities Commission Approval of Power Purchase Agreement for Planned Bay Area State-of-the-Art Power Plant
Calpine Corporation (NYSE:CPN) and GE (NYSE: GE) unit GE Energy Financial Services announced today that the California Public Utilities Commission has approved an amended Power Purchase Agreement for a state–of–the–art combined–cycle natural gas power plant, Russell City Energy Center, to be built in Hayward.
The agreement calls for Russell City Energy Company, LLC –– owned 65 percent by a Calpine Corporation affiliate and 35 percent by a GE Energy Financial Services affiliate – to sell its full 600–megawatt output to Pacific Gas & Electric (PG&E). In addition, PG&E will supply natural gas to the plant for the entire ten–year term of the contract, which is expected to begin in midyear 2012.
"Approval of the amended Power Purchase Agreement brings the Bay Area one step closer to reaping the benefits of the Russell City Energy Center, which will power 600,000 homes with reliable and environmentally responsible power – meeting the region's growing demand for new energy sources," said Thad Hill, Executive Vice President and Chief Commercial Officer for Calpine.
Calpine designed the facility using the best available emissions controls. It will be 40 percent more fuel efficient and significantly cleaner than comparable older technology plants by using advanced "combined–cycle" technology, which captures exhaust from gas turbines and generates additional energy in a steam turbine. In addition to providing a clean, local source of electricity, Russell City will be one of Hayward's largest users of recycled water.
The Russell City Energy Center will create 650 union construction jobs and inject millions of dollars into the local economy. The project also is expected to generate approximately $30 million in one–time tax revenue and $4 million annually in new property tax revenue. Calpine has reached an agreement with the City of Hayward to fund $10 million in community benefits that will improve the quality of life for Hayward residents.
"Today's approval of the amended Power Purchase Agreement for the Russell City power plant project marks another crucial step in our work with our experienced partner, Calpine, to bring a critical new infrastructure asset to the San Francisco Bay Area," said Mark Mellana, a Managing Director of Operating and Development at GE Energy Financial Services.
The Power Purchase Agreement, originally signed in 2006, was amended in 2008 to reflect a new facility online date and contract price. The amended agreement received the endorsement of the Department of Ratepayer Advocates, The Utility Reform Network and California Unions for Reliable Energy.
Calpine, one of California's largest power providers, currently operates 37 power plants in the state, which combined are capable of generating more than 5,200 megawatts of electricity. This is equivalent to almost 10 percent of peak California power demand and is enough electricity to power more than 5 million Californian households. Calpine also is the state's largest renewable energy provider.
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 over 24,000 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
GE is a diversified global infrastructure, finance and media company that is built to meet essential world needs. From energy, water, transportation and health to access to money and information, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company's Web site at http://www.ge.com. GE is Imagination at Work.
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.
For Calpine: Norma F. Dunn
For Calpine: Andre Walker
For GE: Andy Katell