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New plant to provide needed supply of electricity to growing Ontario power market
Calpine to utilize four existing turbines for the project
(SAN JOSE, Calif.) /PR Newswire – First Call/ April 13, 2005 – Calpine Corporation [NYSE:CPN] and Mitsui & Co., Ltd. (Mitsui) have jointly entered into a 20-year Clean Energy Supply Contract (Clean Energy Contract) with the Ontario Power Authority (OPA) to provide clean energy from a new 1,005-megawatt natural gas-fired power plant. The plant, called the Greenfield Energy Centre, will be located in Courtright, St. Clair Township, near Sarnia, Ontario. The project will be owned by Greenfield Energy Centre, L.P., a partnership between Calpine and Mitsui, and will use modern, combined-cycle technology.
The Clean Energy Contract was awarded to Calpine/Mitsui through the Ontario Ministry of Energy’s recent open and competitive request for proposals for 2,500 megawatts of new, clean energy. This new energy centre supports the provincial government’s efforts to replace older coal-fired plants with clean, efficient gas-fired generation that will minimize greenhouse gas and other emissions. Energy and capacity from the Greenfield Energy Centre will be delivered to the Independent Electricity System Operator of Ontario with the contract guaranteed by the OPA.
“We are very excited to be awarded this contract and to have this opportunity to deliver essential electricity to the Province of Ontario in a clean and cost-competitive manner,” said Calpine chairman, president and chief executive officer, Peter Cartwright. “Calpine looks forward to being part of the community in the Courtright area and to being a part of Ontario’s long-term energy solution.”
Fueled by natural gas, the Greenfield Energy Centre will include three combustion turbines and one steam turbine. The facility will deliver electricity directly to Ontario’s transmission grid, at a time when the province is in great need of additional clean generating resources to meet its rapidly growing electricity requirements. The Greenfield Energy Centre will be highly fuel-efficient, which, along with its modern emission-control technology, will result in low emissions-intensity and assist the province in meeting its clean air objectives.
Under the terms of the 20-year Clean Energy Contract, the OPA will guarantee revenue equivalent to a fixed monthly payment plus a payment for variable operations and maintenance costs based on actual electricity generation. The OPA is a newly established organization responsible for ensuring adequate, long-term supply of electricity to Ontario.
Calpine and Mitsui are each 50% partners in the project. Calpine’s equity in the project will be in the form of equipment. Calpine will supply the three combustion turbines and one steam turbine for the project from its existing pool of equipment. The Calpine/Mitsui partnership expects to use non-recourse project debt to finance the construction costs for the $500 million project. Calpine will construct, operate, and maintain the facility. Mitsui is a leading trading firm, providing a full range of trade and industrial development services.
Construction of the Greenfield Energy Centre is expected to begin in December 2005, after the completion of on-going environmental studies and permitting and other required approvals. The contracted commercial operation date of the facility is February 2008. It is currently anticipated that the project will create up to 800 jobs during the construction period, and approximately 25-30 full-time permanent jobs during facility operations.
A major power company, Calpine Corporation supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states, three Canadian provinces and the United Kingdom. Its customized products and services include wholesale and retail electricity, natural gas, gas turbine components and services, energy management, and a wide range of power plant engineering, construction and operations services. Calpine was founded in 1984. It is included in the S&P 500 Index and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information, visit www.calpine.com.
This news release discusses certain matters that may be considered “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the intent, belief or current expectations of Calpine Corporation (“the Company”) and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results such as, but not limited to, (i) the timing and extent of deregulation of energy markets and the rules and regulations adopted on a transitional basis with respect thereto; (ii) the timing and extent of changes in commodity prices for energy, particularly natural gas and electricity; (iii) commercial operations of new plants that may be delayed or prevented because of various development and construction risks, such as a failure to obtain the necessary permits to operate, failure of third-party contractors to perform their contractual obligations or failure to obtain financing on acceptable terms; (iv) unscheduled outages of operating plants; (v) a competitor’s development of lower cost generating gas-fired power plants; (vi) risks associated with marketing and selling power from power plants in the newly-competitive energy market; and (vii)other risks identified from time-to-time in the Company’s reports and registration statements filed with the SEC, including the risk factors identified in its Annual Report on Form 10-K for the year ended December 31, 2004, which can also be found on the Company’s website at www.calpine.com. All information set forth in this news release is as of today’s date, and the Company undertakes no duty to update this information.