Federal Approval for Geothermal Contracts

The Federal Energy Regulatory Commission (FERC) has approved a Reliability Must-Run (RMR) Settlement Agreement, whichapplies to 13 of Calpine Corporation’s 19 geothermal power plants located at The Geysersgeothermal resource in Northern California.

San Jose, California – March 6, 2003 [SolarAccess.com] The Federal Energy Regulatory Commission (FERC) has approved a Reliability Must-Run (RMR) Settlement Agreement, which applies to 13 of Calpine Corporation’s 19 geothermal power plants located at The Geysers geothermal resource in Northern California. Under the agreement, FERC confirmed the 2002 RMR rates and approved the fixed price base for calculating the 2003, 2004 and 2005 RMR rates. As a result, Calpine’s Geysers-specific RMR revenue will be approximately US$45 million for 2002 and is expected to be approximately US$40 million each in 2003, 2004 and 2005. Under the RMR agreement, Calpine’s geothermal facilities provide reliability services benefiting the Northern California power system. Through the RMR designation, the California Independent System Operator (CAISO) can dispatch The Geysers units as needed to maintain the integrity of the regional power grid. Calpine retains the ability to contract with third parties to provide power from the units or to sell power to the CAISO under a contracted energy price included in the settlement. “Since its inception more than 40 years ago, The Geysers has been fundamentally important in ensuring a consistent supply of clean, reliable power to Northern California,” said Calpine Vice President Dennis Gilles, head of Calpine’s geothermal operations. “This agreement speaks to the importance of The Geysers geothermal operations in maintaining the stability of the region’s power system.” Calpine’s ownership in power generation began with the purchase of a 5 percent interest in a 20 MW facility at The Geysers in 1989. Calpine currently owns, leases and operates 19 of the 21 Geysers’ facilities and is the world’s largest producer of geothermal-derived electricity. Calpine is expanding and extending this valuable renewable resource through wastewater recharge projects whereby clean, reclaimed wastewater from local municipalities is recycled into the geothermal reservoir where it is converted into steam for electricity production. This provides an environmentally sound wastewater discharge solution for neighboring cities, while increasing the productivity and extending the life of the geothermal resource.
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