Calpine completes plant acquisitions in New York

Independent power producer Calpine Corp., San Jose, Calif., on Monday said it's completed the $71 million acquisition of two natural gas-fired electric generation facilities in New York, heating up competition in the power-short US Northeast. The deal brings to 3,087 Mw, the total amount of generating capacity Calpine is operating, has under construction, or is planning to develop in the region.


Independent power producer Calpine Corp., San Jose, Calif., on Monday said it's completed the $71 million acquisition of two natural gas-fired electric generation facilities in New York, heating up competition in the power-short US Northeast.

The company reported May 2 it would acquire from an affiliate of Statoil Energy Inc., Alexandria, Va., the remaining 50% interest it didn't already own in the John F. Kennedy International Airport (JFK) power plant, a 107-Mw cogeneration plant, Queens, NY; and the Stony Brook power plant, a 40-Mw congeneration plant.

Electricity and steam from the Stony Brook plant are sold to State University of New York at Stony Brook under a long-term sales agreement. Excess power from both plants is sold to Consolidated Edison Co. of New York Inc., the New York Power Authority, Long Island Power Authority, and other utilities.

Calpine made the initial 50% investment in the facilities in December 1997.

The acquisition "furthers Calpine's goal of establishing a significant market presence in certain key markets, one of which is the area in and around New York City," said Bob Alff, Calpine senior vice-president and eastern region manager. He said the plants will play "an important role in a planned system of Calpine generating plants to serve the customers in this market."

More expansion
The deal brings to 3,087 Mw the total amount of generating capacity Calpine is operating, has under construction, or is planning to develop in the US Northeast. The company said it has 540 net Mw of generation in operation, 888 net Mw under construction, and plans to develop 1,585 net Mw in Connecticut, Maine, Massachusetts, New Jersey, New York, Pennsylvania, and Rhode Island.

Experts say additional generating capacity is badly needed now in the Northeast. Last month, the North American Electric Reliability Council (NERC) predicted the power industries in the US Northeast and parts of the Southwest would be vulnerable to power outages this summer (OGJ Online, May 24, 2000).

NERC says that New York and New England have projected that they might not be able to meet peak generation needs. NERC forecast emergency power procedures are likely to be used in New England and the Northeast during peak summer demand, despite efforts to acquire emergency sources of power and a plan to cut demand by 600 Mw in New England.

Forecasts of shortages have begun to attract numerous players into the market. On June 8, Atlanta-based Southern Energy Inc., a top power producer and marketer, said it would enter the Northeast and mid-Atlantic markets with the acquisition of power plants with total electric generating capacity of 5,154 Mw and other assets from Potomac Electric Power Co. (PEPCO) for $2.65 billion (OGJ Online, June 8, 2000).

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