SAN JOSE, Calif., Oct. 8, 2003 — Calpine Corp. has signed a term sheet setting forth the principal terms and conditions for a ten-year, 570-megawatt power sales agreement with San Diego Gas & Electric (SDG&E).
SDG&E is recommending Calpine’s proposal for approval by the California Public Utilities Commission (CPUC). After CPUC review, as well as completion of a definitive agreement with SDG&E, final approval is anticipated by the end of the first quarter 2004. Today’s announcement is another illustration of Calpine’s long-term strategy of committing the majority of its generating capacity under long-term contracts.
Calpine submitted its proposal to SDG&E as part of the utility’s competitive procurement process initiated in May 2003. Under the final agreement, Calpine will supply electricity to SDG&E from its Otay Mesa Energy Center, currently under construction near San Diego.
Power deliveries to SDG&E are scheduled to begin in 2007. Calpine’s Otay Mesa Energy Center is the first baseload generation plant within San Diego County to begin construction in more than 30 years. A baseload facility is designed to generate electricity on a 24-hour a day basis to ensure maximum reliability and fuel efficiency.
“We are very pleased to have been selected by SDG&E as a key supplier and look forward to helping SDG&E meet its growing power requirements for many years to come,” said Calpine Vice President of Marketing & Sales Curt Hildebrand. “This proposal creates an optimal partnership that draws upon Calpine’s strengths in construction and operation of state-of-the-art power generation facilities while also providing customized energy solutions for SDG&E and its customers. As a result, ratepayers, investors, and the environment benefit through the generation of clean, reliable, and competitively priced electricity.”
“SDG&E’s selection of Calpine further demonstrates the benefit of competitive power procurement and long-term power purchase agreements,” added Hildebrand. “The proposed agreement will further facilitate the completion of the Otay Mesa project and provide the inherent economic, environmental, and system reliability advantages resulting from local generation resources.”
Designed as a highly efficient, combined-cycle facility, the Otay Mesa Energy Center will be fueled with natural gas and include advanced emissions control equipment and water conservation technologies. In addition, in a first-of-its-kind program, new mobile emission reduction credits were created to more than offset emissions from the plant. By retrofitting local marine vessels and sanitation vehicles with vastly improved technology, more emissions than will ever be produced by the project have been permanently retired resulting in a net air quality benefit for the region.
Calpine has long recognized the need to build new sources of generation to meet California’s growing power demand. Since the restructuring of California’s energy market, Calpine has made an unprecedented investment in the state’s energy infrastructure through the development, construction and operation of California’s newest, cleanest and most efficient fleet of natural gas fueled power projects.
Since July 2001, Calpine has added more than 2,600 megawatts of new capacity in California – an accomplishment unmatched by any other company in the energy industry. Presently, Calpine has almost 4,000 megawatts in operation and more than 1,900 megawatts under construction in California.
Calpine Corporation is a North American power company dedicated to providing electric power to wholesale and industrial customers from clean, efficient, natural gas-fired and geothermal power facilities.
The company generates power at plants it owns or leases in 22 states in the United States, three provinces in Canada and in the United Kingdom. Calpine is also the world’s largest producer of renewable geothermal energy, and it owns approximately nine hundred billion cubic feet equivalent of proved natural gas reserves in Canada and the United States. 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 www.calpine.com.