SAN JOSE, Calif., August 16, 2005 (PR Newswire ¿ First Call) — Calpine Corporation has agreed to sell its 550-megawatt Ontelaunee Energy Center to LS Power Equity Partners, LP (LS Power) for $225 million. The asset sale is part of Calpine’s strategic initiative to reduce debt and optimize its power plant portfolio. Since launching its strategic initiative in May 2005, Calpine has completed or announced more than $2 billion of asset sales.
The Ontelaunee sale is the third of four planned power plant sales, which the company announced in June 2005. Calpine expects to complete the sale in September, pending regulatory approval and other conditions of closing. Net proceeds from the sale of Ontelaunee will be used to reduce debt and as otherwise permitted by the company’s indentures.
“By divesting of non-strategic assets like Ontelaunee, we continue to de-lever our balance sheet and re-focus resources on Calpine’s core power markets,” stated Calpine Executive Vice President and CFO Bob Kelly. “At the same time, by providing LS Power a broad range of operational and power services for Ontelaunee, Calpine has a great opportunity to expand our energy services business units.”
As part of the transaction, Calpine will continue to operate the plant on behalf of LS Power for five years, and provide turbine maintenance and parts services for ten years. Calpine Energy Services, the trading and risk management subsidiary for Calpine, will supply a variety of energy services, including power marketing, and scheduling of power and fuel for a six-month term.
The Ontelaunee Energy Center is a natural gas-fired, combined-cycle power plant located in Ontelaunee Township, Pennsylvania. The plant entered operations in 2002 and generates electricity for the Pennsylvania-New Jersey-Maryland power market.
A major power company, Calpine Corporation supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and three Canadian provinces. Its customized products and services include wholesale and retail electricity, natural gas, gas turbine components and services, energy management, and a wide range of power plant engineering, construction and operations services. Calpine was founded in 1984. It is included in the S&P 500 Index and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information, visit www.calpine.com.