The Louisiana Public Service Commission has approved Entergy Gulf States Louisiana LLC’s participation in a 10-year power purchase agreement (PPA) between Calpine Corp.’s (NYSE:CPN) Calpine Energy Services LP subsidiary and Entergy Texas Inc.
Under the PPA, Calpine’s Carville Energy Center will provide 485 MW of power to Entergy Texas, which will sell at cost one-half of the power purchased to Entergy Gulf States Louisiana through a separate agreement.
Calpine Energy Services and Entergy Texas entered into the PPA in May 2011. The regulatory approval and Entergy’s securing of necessary transmission puts Calpine on track to begin delivering power in June 2012.
The PPA was selected through a competitive process that resulted from the 2009 request for proposals for long-term supply side resources issued by Entergy Services.
Under the PPA, Calpine will provide Entergy Texas with a blend of base-load, intermediate and peaking capacity and energy and ancillary products. Entergy Texas will purchase the plant’s full output at summer-rated conditions.
Carville Energy Center, which commenced commercial operation in June 2003, is a highly efficient cogeneration power plant. Using modern, combined-cycle technology, Carville consumes significantly less natural gas and emits less nitrogen oxide per megawatt hour generated than the average fossil-fueled power plant. In addition to generating electricity, Carville provides steam for industrial processing to Cos-Mar Incorporated under a long-term contract.