Calpine bets again on Texas electricity
Houston-based Calpine Corp. announced its second expansion in Texas this year on Thursday when it said it will buy a natural gas-fired power plant for $432 million. In April, Calpine said it would add 520 megawatts of capacity at two Texas facilities it owns. In both cases it has cited its expectation of tightening supplies amid continued demand growth, with the likelihood of higher prices for producers. In its latest move, Calpine is buying an 800-megawatt plant near Laguna Park, about 70 miles south of Fort Worth, from Bosque Power Co. LLC. The deal's expected to close next month.
In a news release, CEO Jack Fusco said acquiring the plant is "consistent with our strategy to boost capacity in Texas as electric demand rises and reserve margins tighten." The 280-acre facility includes a 250-megawatt unit with one natural-gas turbine that went into operation in 2001, and a 550-megawatt unit with two gas turbines that started running in 2000. The state's largest power grid, the Electric Reliability Council of Texas, has warned that the state's electricity capacity could be uncomfortably close to projected demand by 2014 and thereafter. ERCOT aims for a 13.75 percent margin of capacity over anticipated peak demand. State regulators have recently raised the cap on wholesale power prices to encourage more investment in new power supply.
-- Jim Fuquay