Calpine Receives California Energy Commission Approval to Construct 600-MW Russell City Energy Center



    SAN JOSE, Calif., Sept. 26 /CNW/ -- Calpine Corporation (Pink Sheets:  
CPNLQ) received final approval today from the California Energy Commission
(CEC) to construct the 600-megawatt Russell City Energy Center in Hayward,
Calif.  Calpine expects to begin construction of the new energy center in the
spring of 2008 and operate the plant when it starts production in mid-2010.
    Calpine's co-investor in Russell City is Stamford, Conn.-based GE Energy
Financial Services, which acquired a 35 percent interest in the plant from
Calpine in September 2006.  As a result of a competitive bidding process,
Pacific Gas and Electric Company (PG&E) selected Calpine to help strengthen
Bay Area power reliability.  PG&E will purchase the full output of the power
plant under a ten-year agreement.
    "Calpine appreciates the dedication and hard work of the CEC
Commissioners and staff in helping to ensure that Bay Area homes and
residences will benefit from one of the nation's cleanest and most
fuel-efficient energy resources," stated Calpine Chief Executive Officer
Robert P. May.  "With the support of our co-investor GE Energy Financial
Services, the Russell City Energy Center will be a reliable, cost-effective
and environmentally preferred source of electricity for our valued customer,
PG&E.  And as a low-carbon, natural gas energy resource, the new facility will
help California achieve its near- and longer-term air quality goals."
    Russell City will be the newest, state-of-the-art energy center to be
built in California.  Calpine designed the natural gas-fueled facility using
best available emissions controls and combined-cycle technology -- the
cleanest and most fuel efficient of its kind in the industry.  These
clean-energy technologies will make Russell City 40 percent more
fuel-efficient and will allow for a greater than 90 percent reduction of
emissions compared to the average U.S. fossil-fueled power plant.
    In addition to providing a clean, local source of electricity, Russell
City will be one of Hayward's largest users of recycled water, helping the
City to reduce its impact on sensitive San Francisco Bay habitat.  Calpine
will construct the plant at an industrial site adjacent to Hayward's recycled
water treatment facility.  During peak construction, Russell City will create
approximately 650 union construction jobs.  A 25-member Calpine operations
staff will help ensure Russell City generates electricity safely and reliably
-- twenty-four hours a day, seven days a week.
    
    Calpine in California
    
    Calpine Corporation has made an unprecedented investment in California's
energy infrastructure through the construction and operation of the state's
newest, cleanest, and most fuel-efficient fleet of power plants.  The state's
single largest producer of power from renewable resources, Calpine was also
the first company to license and construct a major California power plant in
more than a decade and is responsible for the first baseload generation built
in the San Francisco Bay Area in more than 30 years.  Since July 2001, Calpine
has added more than 4,000 megawatts of new capacity in California -- an
accomplishment unmatched by any other company in the energy industry.
    
    About Calpine
    
    Calpine Corporation is helping meet the needs of an economy that demands
more and cleaner sources of electricity.  Founded in 1984, Calpine is a major
U.S. power company, capable of delivering nearly 24,000 megawatts of clean,
cost-effective, reliable and fuel-efficient electricity to customers and
communities in 18 states in the U.S.  The company owns, leases and operates
low-carbon, natural gas-fired and renewable geothermal power plants.  Using
advanced technologies, Calpine generates electricity in a reliable and
environmentally responsible manner for the customers and communities it
serves.  Please visit http://www.calpine.com/ for more information.
    
    About GE Energy Financial Services
    
    GE Energy Financial Services' 350 experts invest globally with a
long-term view, backed by the best of GE's technical know-how and financial
strength, across the capital spectrum and the energy and water industries, to
help their customers and GE grow.  With $14 billion in assets, GE Energy
Financial Services, based in Stamford, Connecticut, invests more than $5
billion annually in two of the world's most capital-intensive industries,
energy and water.
    
    About GE
    
    GE (NYSE:   GE) is a diversified technology and services company dedicated
to creating products that make life better.  From aircraft engines and power
generation to financial services, medical imaging, television programming and
plastics, GE operates in more than 100 countries and employs more than 300,000
people worldwide.  For more information, visit the company's Web site at
http://www.ge.com/.
    
    Calpine Forward-Looking Statement
    
    In addition to historical information, this news release contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Words such as "believe," "intend," "expect," "anticipate,"
"plan," "may," "will" and similar expressions identify forward-looking
statements. Such statements include, among others, those concerning the
company's expected financial performance and strategic and operational plans,
as well as all assumptions, expectations, predictions, intentions or beliefs
about future events. You are cautioned that any such forward-looking
statements are not guarantees of future performance and that a number of risks
and uncertainties could cause actual results to differ materially from those
anticipated in the forward-looking statements. Such risks and uncertainties
include, but are not limited to: (i) the risks and uncertainties associated
with the company's Chapter 11 cases and companies' Creditors Arrangement Act
proceedings, including its ability to successfully reorganize and emerge from
Chapter 11; (ii) its ability to implement its business plan; (iii) financial
results that may be volatile and may not reflect historical trends; (iv)
seasonal fluctuations of results; (v) potential volatility in earnings
associated with fluctuations in prices for commodities such as natural gas and
power; (vi) its ability to manage liquidity needs and comply with financing
obligations; (vii) the direct or indirect effects on the Company's business of
its impaired credit including increased cash collateral requirements in
connection with the use of commodity contracts; (viii) transportation of
natural gas and transmission of electricity; (ix) the expiration or
termination of power purchase agreements and the related results on revenues;
(*) risks associated with the operation of power plants including unscheduled
outages; (xi) factors that impact the output of its geothermal resources and
generation facilities, including unusual or unexpected steam field well and
pipeline maintenance and variables associated with the waste water injection
projects that supply added water to the steam reservoir; (xii) risks
associated with power project development and construction activities; (xiii)
its ability to attract, retain and motivate key employees; (xiv) its ability
to attract and retain customers and counterparties; (xv) competition; (xvi)
risks associated with marketing and selling power from plants in the evolving
energy markets; (xvii) present and possible future claims, litigation and
enforcement actions; (xviii) effects of the application of laws or
regulations, including changes in laws or regulations or the interpretation
thereof; and (xix) other risks identified in the Company's annual and
quarterly reports on Forms 10-K and 10-Q. All information set forth in this
news release is as of today's date, and the Company undertakes no obligation
to update any forward-looking statements, whether as a result of new
information, future developments or otherwise.




For further information:

For further information: Media Relations, Mel Scott, +1-713-570-4553, 
scottm@calpine.com, or Investor Relations, Karen Bunton, +1-408-792-1121, 
karenb@calpine.com, both of Calpine Corporation Web Site:
http://www.calpine.com                  http://www.ge.com

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CALPINE CORPORATION

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