Calpine (NYSE: CPN) said Sept. 25 that its 1,134-MW (net) Oneta power plant has agreed to a long-term contract to sell roughly a quarter of its output to American Electric Power (NYSE: AEP), which is acting as agent for its Public Service Co. of Oklahoma (PSO) subsidiary.
Oneta will sell 260 MW of electric generation capacity and power and ancillary services under the contract, which runs from mid-2016 through mid-2031.
The contract is conditioned on certain approvals from the Oklahoma Corporation Commission and on securing satisfactory transmission service
Calpine won the contract through a competitive process resulting from a request for proposals that the AEP affiliate issued earlier this year.
Oneta is a combined-cycle, natural gas plant located near Tulsa. “We are pleased to partner with PSO to provide Oklahomans with power that is generated locally from cleaner burning natural gas produced in Oklahoma,” said Calpine COO Thad Hill.
“When this 15-year power purchase agreement takes effect, Oneta’s capacity will be almost fully subscribed for the balance of the decade at pricing levels that reflect the tightening reserve margins in the region,” Hill said.