Independent power producer Calpine Corp. acquired Dow Chemical’s70 MW gas-fired power plant at Dow’s Pittsburg, CA, chemicalfacility for about $13 million. The deal includes Dow’s gaspipeline system that provides the plant with low-cost fuel fromSacramento basin gas fields. Key to the transaction is Calpine’splan to build a 500 to 700 MW gas-fired power plant adjacent toDow’s Pittsburg chemical plant. The new power plant will requirecapital of $250 million to $350 million and will generate enoughelectricity to power half a million households. The existing plantuses 16,000 MMBtu/d, and the new plant will use 80,000 to 90,000MMBtu/d.

As the new owner/operator of the Pittsburg Power Plant, Calpinewill sell up to 18 MW of electricity to Dow for up to 15 years. Thebalance of the power will be sold to Pacific Gas and Electric Co.under a long-term contract. Calpine will sell steam generated fromthe plant to Dow for use at its chemical facility for up to 20years and to USS-POSCO Industries’ nearby steel mill. Calpine saidit anticipates construction of the new plant to begin in 2000. Theplant will burn about 40% less fuel to generate a kilowatt hour ofelectricity than the average gas-fired plant in operation today.

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