Calpine Corp. last Monday said that it has entered into a definitive agreement to sell its 50% interest in the 545 MW Lost Pines 1 Power Project to GenTex Power Corp.

GenTex, Calpine’s partner since the plant was developed and went online in July 2001, is an affiliate of the Lower Colorado River Authority (LCRA). Calpine remains the leading independent power producer in Texas, with more than 6,000 MW in operation.

Calpine Energy Services will enter into an agreement with LCRA to purchase 250 MW of electricity through Dec. 31, 2004. The company expects to report a gain on the sale of its interest in the project when the transaction closes during the first quarter of 2004.

“Calpine will benefit from an attractive return on its investment,” stated Darrell Hayslip, Calpine senior vice president, marketing and sales. “In addition, LCRA will be able to meet its growing energy requirements without building new capacity. They will now be able to take even greater advantage of this modern, gas-fired, combined-cycle facility as the sole owner and operator.

Calpine’s 50% interest in the Lost Pines project is owned by Calpine Construction Finance Co. L.P. (CCFC), which is a wholly owned subsidiary of Calpine, and is included in the security package for CCFC’s $800 million secured note financing. CCFC expects to approach the holders of these notes for their consent to reinvest the net proceeds from this sale into additional power generation assets.

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