Calpine is Working on Agreement to Acquire Geothermal Steam Field

Calpine Corporation is currently working on negotiations to acquire Unocal Corporation's geothermal steam field assets located at The Geysers area of Northern California-- the world's largest producing geothermal resource.

The San Jose, CA-based independent power company holds a 25% interest in the 14,000-acre steam field operation through its joint venture with Unocal. The steam field fuels Pacific Gas and Electric Company's (PG&E) 12 Sonoma County power plants, totaling 544 megawatts of capacity.

When the acquisition is completed, which is expected to happen within the next two months, Calpine plans to exercise the right of first refusal to purchase PG&E's Sonoma County geothermal power plants by matching the winning $139 million bid for these assets. In December 1998, Calpine announced it had exercised its right of first refusal to acquire PG&E's Lake County geothermal power plants-- totaling 144 megawatts of capacity-- for $73.8 million. With the Unocal and PG&E acquisitions, Calpine will own and operate more than 800 megawatts of low-cost geothermal production. The company will market electricity from its Geysers portfolio into the newly deregulated power market.

Calpine has been in the geothermal industry for 15 years. The company has been an active participant at The Geysers since 1987 and currently owns 477 net megawatts of geothermal steam field and power plant operations.

Since it started at Geysers, Calpine has pioneered programs to extend resource production. In partnership with PG&E, Lake County, state and federal agencies and other Geysers operators, Calpine built a 26-mile pipeline to transport treated wastewater for injection into steam producing regions of The Geysers reservoir. The wastewater injection program entered operation in 1997 and has increased geothermal production by approximately 50 megawatts.