Calpine, GE Energy Financial Services Obtain California Public Utilities Commission’s Authorization Of Modified Power Purchase Agreement For Gas Plant

Published: 16-Apr-2009

By: Staff Writer Staff Writer Staff Writer

Calpine Corporation (Calpine) and GE Energy Financial Services received authorization from California Public Utilities Commission for a modified Power Purchase Agreement for Russell City Energy Center, a gas power plant to be built in Hayward, California, media sources reported. As per the agreement, Russell City Energy Company, LLC, owned 35% by a GE Energy Financial Services affiliate and 65% by a Calpine affiliate, must sell 600 megawatt (MW) output to Pacific Gas and Electric Company (PG&E).

PG&E will provide natural gas to the combined-cycle gas plant for the total 10 year term of the contract, which is slated to commence in mid 2012.

Thad Hill, Calpine’s executive vice president and chief commercial officer, said “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.”

Calpine designed the station utilizing emissions controls. It will be 40% more fuel efficient and cleaner than comparable traditional technology plants by utilizing advanced combined-cycle technology, which secures exhaust from gas turbines and produces extra energy in a steam turbine. Besides supplying a clean, local source of electricity, Russell City will use recycled water.

The Russell City Energy Center will generate 650 union construction jobs and infuse millions of dollars into the domestic economy. The project is likely to garner nearly $30 million in one-time tax revenue and yearly $4 million in new property tax revenue. Calpine has signed an agreement with the City of Hayward to finance $10 million in community benefits.

Initially signed in 2006, the Power Purchase Agreement, was modified in 2008 to represent a new facility online date and contract price. The modified agreement obtained the authorization of The Utility Reform Network, Department of Ratepayer Advocates and California Unions for Reliable Energy.

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