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.
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After counseling from some of its board members, the CaliforniaIndependent System Operator (ISO) has decided not to seek relieffrom the Federal Energy Regulatory Commission for an unprecedentedprice spike it experienced July 9 for reserve power in California’srestructured electricity markets, according to an ISO spokesperson.
The Natural Gas Supply Association and Independent PetroleumAssociation of America made their displeasure clear over PresidentBill Clinton’s decision last week to extend a moratorium onoffshore drilling. “Cleaner air and increased use of affordable,clean-burning natural gas depend on access to the large natural gasfields off the nation’s coasts,” said NGSA President Nicholas Bush.”Continuing today’s severe restrictions on offshore natural gasproduction is simply not in the nation’s best interest.”
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.
Independent Power Producer Cogentrix Energy has signed anagreement with Bechtel Enterprises Inc. to acquire Bechtel’sownership interests in 12 electric generating facilities, plus afractional share of Iroquois Pipeline. Most of the properties wereon the market as the result of PG&E Corp.’s acquisition lastfall of Bechtel’s interest in U.S. Generating Co. Regulatoryconstraints barred PG&E from acquiring certain of the USGenassets.
Despite a three-month delay because of technical interfaceproblems, the California Independent System Operator and theCalifornia Power Exchange Corp. (PX) announced they have completeda week’s worth of testing and have notified FERC they’re ready toopen the statewide electricity market on March 31. They intend tocommence operations by accepting bids in the Day Ahead market onMarch 31 with the first full day of operations being the day after.
The Independent Petroleum Association (IPAA) has filed a lawsuitagainst the Department of the Interior, claiming that through a newnatural gas royalty regulation DOI’s Minerals Management Service iscollecting a larger share of royalties than it is entitled to.