Calpine, GE Energy To Begin Construction Of Natural Gas-Fired Power Plant

San Jose, CA — To help assure the development of sufficient power supplies in Southern California, Calpine Corporation and the Energy business of General Electric Company will begin construction this month of North America's most advanced gas turbine combined-cycle power plant at the Inland Empire site in Riverside County, California. The 800-megawatt, natural gas-fired power plant received its license from the California Energy Commission in June, and GE has now acquired the site and related development rights for the project from Calpine. The companies expect to bring the Inland Empire Energy Center on line by the summer of 2008 -- in time to help offset state-forecasted energy shortfalls in Southern California.

The companies have now signed definitive agreements whereby GE will finance, own and operate the Inland Empire Energy Center. Calpine Power Services will manage plant construction, and Calpine Energy Services will market the plant's output and manage its fuel requirements under a long-term marketing arrangement with GE. Following an extended period of GE ownership, Calpine will purchase the plant and become its sole owner and operator, with GE continuing to provide critical plant maintenance services under a long-term agreement with Calpine.

"Southern California is one of the most energy-deficient power markets in the U.S. In fact, just this summer, the region has experienced two Stage Two Alerts," said Calpine Executive Vice President Bob Fishman. "GE and Calpine are demonstrating that private investment, combined with industry-leading technology and power generation experience, will continue to keep the lights on in California."

As part of GE's recently announced ecomagination(SM) initiative to bring to market new technologies that will help customers address pressing environmental challenges, the H System(TM) represents the industry's most fuel-efficient, gas turbine combined-cycle technology and is the first capable of achieving 60 percent thermal efficiency. Powered by two GE 107H Systems, the Inland Empire Energy Center will generate enough electricity to supply nearly 600,000 households while reducing future carbon dioxide emissions by more than 146,000 tons per year compared to a typical gas turbine combined-cycle plant.

"California is the seventh largest economy in the world, and we are very pleased to bring to the state GE's most efficient gas turbine combined-cycle technology," said John Krenicki, president and CEO of GE Energy. "We look forward to working with Calpine in making this valuable energy resource a reality."

SOURCE: Calpine Corporation