Two combined-cycle natural gas-fired power generation plants
) have come online. These two plants, namely Russell City Energy
Center and Los Esteros Critical Energy Facility, together have an
electric generation capacity of more than 900 megawatts (MW).
Located in Hayward, Calif., the Russell City Energy Center has
an electric generation capacity of 619 MW. Calpine owns 75% of
the project while
General Electric Company
) is the owner of the balance of the plant. To date, the plant
has contributed more than $25 million in initial sales and
property tax revenue. During its operation, recurring property
tax revenues are expected to be approximately $5 million per
annum, which will help in funding local government services.
This natural gas-fired power plant employs the most advanced
emissions control technology. With minimal green house gas
emissions, this fuel-efficient plant readily responds to the
dynamic grid conditions. This environment friendly zero-liquid
discharge plant saves water by using reclaimed wastewater from
the City of Hayward's Water Pollution Control Facility. This
prevents up to four million gallons of wastewater from being
discharged into the San Francisco Bay per day.
Besides being eco-friendly, the company also fulfills its
Corporate Social Responsibility. During the peak construction
period, the plant employed 650 local union workers and currently
employs 30 full-time operations staff.
Located in San Jose, the Los Esteros Critical Energy Facility
has an electric generation capacity of up to 309 MW. When the
plant first began its commercial operations in Mar 2003, it only
generated 188 MW of power. However, the modernization and
addition of heat-recovery steam generators have helped in
increasing the plant's power generation capacity while improving
efficiency and environmental performance. Like Russell City
Energy Center, this plant also responds to electric grid demand
and prevents an additional two million gallons per day from being
discharged into the San Francisco Bay.
As a result of construction upgrade, the plant has generated
approximately $5 million in one-time tax revenue. Going forward,
it is expected to contribute approximately $3 million on an
annual basis in recurring tax revenues to local governments. Like
the other plant, this plant has also employed local union workers
and other employees.
Taken together, these two modern, efficient and
environmentally responsible combined-cycle natural gas-fired
power generation plants have the capability to power
approximately 750,000 homes. The electricity generated from these
two plants will be sold to Pacific Gas and Electric Company
(PG&E), a subsidiary of
Calpine Corp. generates more electricity than any other
independent power producer in America, with a fleet of 93 power
plants in operation or under construction, representing more than
28,000 MW of generation capacity. The addition of the nat gas
plants would bring the total number of plants owned by Calpine to
37 with total electric generation capacity of more than 6,300 MW.
Besides meeting the power need of its customers, these plants
will ensure the grid's reliability by producing flexible, nat
However, Calpine's weak second quarter 2013 results, lower
demand for electricity due to an unfavorable macro backdrop and
lower commodity margins remain matters of concern. The company
presently retains a short-term Zacks Rank #3 (Hold).
In the near term, we would advise investors to accumulate its
short-term Zacks Rank #1 (Strong Buy) peer
Huaneng Power International, Inc.
CALPINE CORP (CPN): Free Stock Analysis
GENL ELECTRIC (GE): Free Stock Analysis
HUANENG POWER (HNP): Free Stock Analysis
PG&E CORP (PCG): Free Stock Analysis
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