King City, Calif., May 20, 2010 — GE Energy Financial Services is expanding its 26-GW power portfolio by buying the King City cogeneration power plant in California’s Salinas Valley for $68 million.
Calpine Corp., based in San Jose, has leased, operated and maintained the plant since 1996 and will continue to do so under GE’s ownership.
The plant sells its electricity to Pacific Gas & Electric Co. under a contract until 2019, and supplies steam to a nearby vegetable processing facility.
GE Energy Financial Services is buying the ownership stake in the plant from Kelson Canada, a subsidiary of Harbinger Capital Partners. The GE business knows the plant well because it has been providing a $47 million loan to the project since 2003.
“Our acquisition of the King City Cogeneration Plant underscores our strategy of growing our power portfolio across a wide range of generation technologies and fuel sources, participating in the industry using a wide range of capital products and structures, and deepening our relationships with key customers and partners such as Calpine,” said Alex Urquhart, president and CEO of GE Energy Financial Services.
Calpine and GE have worked together successfully on several operating and in-development power projects, especially in Calpine’s core market of California. These include the Russell City Energy Center, the Inland Empire Energy Center, Pasadena Cogeneration, Metcalf Energy, the Otay Mesa Energy Center and the Fox Energy Center.
GE Energy Financial Services’ global portfolio of power projects can produce 26 GW, equivalent to the installed generating capacity of Thailand.