Calpine Corporation (NYSE:CPN) announced that it has executed Resource Adequacy contracts (RA contracts) with California’s three investor-owned utilities – Pacific Gas and Electric Company, Southern California Edison Company and San Diego Gas and Electric Company (the Utilities) – for the purchase of resource adequacy from the Sutter Energy Center (Sutter) for the period from July 1 through December 31, 2012.
The RA contracts will enable Sutter to continue in operation as the California Public Utilities Commission moves forward in developing long-term capacity procurement policies to ensure modern, existing resources remain available to meet California’s future power demands.
The RA contracts are being submitted for approval to the Commission pursuant to Resolution E-4471, in which the Commission directed the Utilities to enter into contract negotiations with Calpine for the purpose of keeping the Sutter plant online through 2012.
The resolution requires the Utilities to submit a Tier 2 Advice letter attaching the RA contracts, which filings were made on May 4, 2012.
Located near Yuba City, California, Sutter is one of the state’s newest and cleanest natural gas-fired power plants. This modern, efficient, air cooled, combined-cycle power generation facility has the capacity to produce up to 578 megawatts of electricity. It commenced commercial operation in 2001 and is a vital contributor to the local Sacramento Valley economy, generating more than $2.6 million in annual property tax revenue and employing 26 local residents with an annual payroll of approximately $3 million.
Sutter received strong support throughout this process from many elected officials, including United States Congressman John Garamendi, California State Senator Doug LaMalfa and State Assemblyman Jim Nielson, as well as representatives of the Yuba City and Sutter and Yuba County business community, a number of whom provided testimony at Commission public meetings outlining how critical the continued operation of Sutter Energy Center is to the local economy.