Calpine Committed to $4 Billion Electric Generating Initiative to Help
Address California Energy Crisis
SAN JOSE, Calif., Nov. 21 /PRNewswire/ -- San Jose, Calif.-based Calpine Corporation (NYSE: CPN - news) expressed its continued strong commitment to building new
generation to help alleviate the state's energy crisis through a multi-billion dollar energy program.
``Calpine is committed to California,'' stated Calpine Vice President Jim Macias. ``In addition to our 4,700-megawatt energy program currently under way, Calpine expects
to announce plans to develop an additional 3,000 megawatts of new capacity in California. In all, we have a program in place to build some 7,700 megawatts of clean,
energy-efficient generation in and around California over the next five years, representing a $4 billion investment in California's energy market.''
The recently issued California Energy Commission (CEC) report predicts, ``California should have enough power to meet its electricity demand next summer, unless the
State experiences extraordinarily hot weather.'' The CEC's favorable findings rely in part on the addition of new generation next summer, the majority of which Calpine is
building.
Calpine's two new facilities -- Sutter and Los Medanos -- will bring over 1,000 megawatts of high-efficiency base load generation to the market next summer. Much of the
remaining capacity expected to come on-line will be temporary peaking generation. The report also assumes voluntary reduction in peak demand, continued availability of
imported power from outside the state, and continued operation of aging power plants.
``California's fundamental problem is an antiquated electric power infrastructure, which is threatening reliability,'' added Macias. ``No major gas-fired generation has been
built since 1972. In fact, approximately 80% of California's gas-fired plants are over 30 years old. As a result, this over-worked, inefficient generation base is frequently
down for repair and maintenance. Currently, over 10,000 megawatts of needed capacity is off-line for this reason. Similar to how California has a need to expand its
highways, education, and housing infrastructure, it must modernize its power infrastructure with energy-efficient, environmentally sound energy resources.''
Calpine has launched the largest power generating initiative in California. Building upon its existing 1,300-megawatt natural gas and geothermal operating portfolio, Calpine
has 2,300 megawatts of energy centers in construction in and around California, and has announced the development of an additional 1,100 megawatts of generation. This
4,700-megawatt energy program will help supply nearly five million California households.
One of Calpine's strategic development projects is the 600-megawatt Metcalf Energy Center (MEC), located in fast-growing San Jose. This joint development with San
Francisco-based Bechtel Enterprises, if approved, is expected to begin energy deliveries in time for the peak power demand period in 2003. The October 10, 2000, CEC Final
Staff Assessment on MEC stated:
The Independent System Operator has identified MEC as a time-critical project. If approved and constructed, MEC would emphasize the need for more generation
throughout the state to enhance reliability and relieve high prices driven by insufficient supply. The proposed project addresses this critical objective in the near term.
Macias also cited another critical component that will help stabilize California's energy market-forward market purchasing. ``One of the key market flaws in California has
been the inability of utilities to buy power ahead of time at a pre-determined price,'' stated Macias. ``Until recently, California's utilities were largely limited to buying power
in the volatile ''spot market,`` and had little ability to purchase power more than one day in advance of their customers' need. This is analogous to a travel strategy of
consistently showing up at an airport without a ticket hoping there's an extra seat at a reasonable price.''
``We believe a major factor with respect to market instability can be controlled by energy suppliers entering into long-term electricity supply contracts,'' added Macias.
``Calpine is prepared to advance the benefits of our future capacity by offering very attractive supply contracts to California utilities.''
To that end, Calpine has entered into several forward contracts with Pacific Gas and Electric Company, Sacramento Municipal Utilities District, Imperial Irrigation District and
the Association of Bay Area Governments.
Based in San Jose, Calif., Calpine Corporation is dedicated to providing customers with reliable and competitively priced electricity. Calpine is focused on clean, efficient
combined-cycle, natural gas-fired generation and renewable geothermal energy. Calpine has launched the largest power development program in the U.S. To date, the
company has approximately 26,800 megawatts of base load capacity and 5,100 megawatts of peaking capacity in operation, under construction and in announced
development in 27 states and Alberta, Canada. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more
information about Calpine, visit its website at www.calpine.com. |
