Calpine’s Oneta plant to sell power to AEP unit in Oklahoma

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.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.