One of the nation’s largest and fastest growing municipalutilities, the Sacramento Municipal Utility District (SMUD) Tuesdaysigned a multi-million-dollar five-year deal for 150 MW ofpurchased power from Calpine Corp. Terms of the agreement werebeing kept confidential. The deal starts in the summer of 2001when Calpine’s first new natural gas-fired merchant generationplants in Sutter County begins operations about 50 miles north ofSacramento in northern California. Now under construction, theSutter plant is the first of a series that Calpine and othermerchant generators are planning to build in California over thenext five to ten years.

SMUD general manager Jan Schori said this is the first purchasedpower deal her 1-million-customer utility has signed with amerchant plant, adding that “it proves that there are opportunitiesin the new restructured environment for municipal utilities and’for-profit’ entities to work together to achieve mutual benefits.”Calpine is expected to use some of its own natural gas supplies inthe general Sacramento Basin to fuel the plant, at least partially.It has recently announced the acquisition of additional reserves inthe Basin. The supplies, however, will flow through Pacific Gas andElectric’s transmission pipeline system to which the Sutter plantis linked.

In other merchant plants in northern California, Calpine isplanning on tying in with its own pipeline system in the SacramentoBasin, along with the PG&E pipelines.

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