Reuters: Financial Services and Real Estate: Calpine to keep Calif. Sutter power plant running

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Calpine to keep Calif. Sutter power plant running May 8th 2012, 13:19 Tweet Share this Email Print Related Topics Stocks » Markets » Financials » Utilities » Tue May 8, 2012 9:19am EDT * Utilities contract with Sutter end of year * California power prices at 10-year lows * State to work on long term power capacity program By Scott DiSavino May 8 (Reuters) - U.S. power generating company Calpine Corp signed contracts with California's three investor-owned utilities to keep Calpine's Sutter power plant in California in service for the rest of the year. Calpine had said the plant could close if it did not get a contract to keep it operating. Sutter is a 530-megawatt natural gas-fired, combined-cycle power plant built in 2001 near Yuba City in Sutter County about 40 miles (64 km) north of Sacramento. With several older power plants in California expected to shut over the next several years due in part to environmental water cooling rules, the state's utility regulators are working on long-term plans to keep newer power plants like Sutter available for the future. The state's utilities still have long-term contracts to buy power from several of those older power plants that will expire over the next several years, so the utilities do not at this time need to sign new contracts with newer plants like Sutter. That would not be a problem if power prices in California were higher because plants like Sutter could sell their output into the market. But electric prices in the Golden State are currently at 10-year lows because natural gas prices are also near 10-year lows. Natural gas fuels over 60 percent of the generating capacity in California. The average price of power in California so far this year has been in the $20s per megawatt hour versus a 10-year average in the $50s. The investor-owned utilities in California are units of California power companies Edison International, PG&E Corp and Sempra Energy. Calpine said the contracts with the utilities run from July 1-Dec. 31, 2012, enabling Sutter to continue operation as state regulators develop long-term capacity procurement plans. Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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