One of the nation’s fastest growing nonutility power plantdeveloper/operators, Calpine Corp., San Jose, CA, is taking ahands-on approach to building a diversified natural gas portfolioto fuel what it eventually hopes is a network of highly efficient,environmentally clean combined-cycle power plants with a collectivecapacity of 25,000 megawatts.

Calpine’s western region fuel executive acknowledged recentlythat the company is closely following California’s ongoing attemptto restructure its gas infrastructure operations, but delays inthat process won’t deter the 15-year-old company’s plans to use acombination of interstate supplies, own-source gas, storage andthird-party deals to maximize its electricity operations.

The acquisition earlier this year of Sheridan Energy wasdesigned to help the company develop new skills in exploration andproduction sectors, said Brad Barnds, vice president for fuels inCalpine’s 12-state western region.

“Each [new California power] plant will be served from aportfolio approach, which will include third-party purchases fromCanadian suppliers, Rocky Mountain suppliers, interstate pipelines,PG&E and our own propriety gas reserves and pipeline structurein northern California,” said Barnds, adding that it will tie intoboth the new merchant underground gas storage projects beingdeveloped in northern California.

An example, Barnds said, is found in five qualifying facility(QF) plants in California for which Calpine eliminated third-partygas contracts two years ago in favor of their own portfolio mix. Hesaid the company has lowered its fuel costs to the point where theyare now running below market.

“The point is that we’re not going to turn the keys to the carover to some marketer for gas,” Barnds said. “We’ll provide thatfunction and try to wring out the last ounce of efficiency in thegas market and control not only our pricing, but the flow,scheduling and nomination of gas to manage the dispatch to each ofour power plants so we can optimize the margin between gas andpower pricing.”

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