In a transaction making it the largest independent powerproducer in Texas, Calpine Corp. acquired the remaining 50% interest in Texas Cogeneration Co. (TCC), owner of two gas-firedpower plants in Texas City and Pasadena, TX, with 827 MW ofcapacity. Calpine of San Jose, CA, bought the remaining interest inTCC from Dominion Cogen Inc. for about $53 million, plus contingentpurchase payments beginning in 2000 that could approximate 2.9% ofproject revenue. As part of the deal, Calpine now owns a 7.5%interest in a 165 MW gas-fired cogeneration plant located inBayonne, NJ. Calpine Fuels Texas, a subsidiary of Calpine, buys gasfor the Texas plants from Enron Capital & Trade Resources(ECT). In a related transaction, Calpine Fuels Texas paid about$105 million to ECT to restructure its existing gas contracts.
“In less than a year, Calpine has established a solid generationbase to serve the growing Texas energy market,” said Ron Walter,Calpine senior vice president. “We’re continuing to expand ouroperations by acquiring and developing modern, efficient gas-firedpower plants throughout the state. By 2001, we expect to have over1,700 MW of low-cost, clean power production on line in Texas.”Calpine now owns a 100% interest in the 450 MW Texas City PowerPlant and the 377 MW Clear Lake Power Plant in Pasadena, TX.Calpine purchased an initial 50% interest in, and began operating,the plants in June 1997.
The Texas City and Clear Lake power plants supply TexasUtilities Electric Company, Texas New Mexico Power Co. and HoustonLighting & Power. As cogenerators, they also provideelectricity and steam to Union Carbide’s chemical facility and toCelanese Chemical Group’s organic chemicals plant. Texas Utilitiesrecently amended its power sales agreement, extending powerdeliveries from the Texas City plant through September 2002.
In Pasadena, TX, Calpine is nearing completion on a 240 MWnatural gas-fired power plant. The Pasadena 1 Power Plant, slatedfor start-up in July, will generate electricity and steam for saleto Phillips Petroleum’s Houston Chemical Complex. Additionalcapacity is being sold to other wholesale customers.
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