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2 April 2004 - Calpine Corporation yesterday completed the purchase of the Brazos Valley Power Plant in Fort Bend County, Texas, for approximately $175m. Fuelled by natural gas, the combined-cycle facility is designed to generate 570 MW of electricity for the growing Texas power market.
Calpine's wholly owned subsidiary, Calpine Construction Finance Company, L.P. (CCFC I), acquired the companies that owned the Brazos Valley project with net proceeds of approximately $150m from the January sale of its half-interest in the Lost Pines 1 Power Project. As a result, CCFC I had the opportunity to defer tax liability by conducting a like-kind exchange. With the expected cash flow and earnings from the plant, the acquisition represented the best investment opportunity for Calpine, CCFC I and CCFC I bondholders, who consented to the acquisition.
Peter Gross, vice president, Calpine marketing and sales, said the deal was financially advantageous, noting, "The addition of Brazos Valley to Calpine's portfolio will provide further opportunities to enhance the efficiencies of our operating system, lower our cost of production and better meet our customers' needs."
Calpine is the largest independent power producer in ERCOT and has the cleanest, most fuel-efficient fleet of natural gas-fired facilities. With this transaction, Calpine has 11 power plants in ERCOT, capable of generating more than 6700 MW of electricity for the growing ERCOT market. The company's system of plants is designed to sell power under both short- and long-term contracts to wholesale and industrial power customers.
Brazos Valley is located about 25 miles southwest of Houston. It entered commercial operations in July 2003 and is powered by two General Electric 7FA turbines.
CCFC1 acquired Brazos Valley from a consortium of banks that had provided construction financing for the power plant and had taken possession of the plant from the original developer in 2003.
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