Calpine Reviewing Adding 550 MW in ERCOT

Calpine said this morning that it is evaluating adding at least 550 MW of new capacity in ERCOT.

"We continue to evaluate the ERCOT market for expansion opportunities based on tightening reserve margins and potential impact of EPA regulations on generation in Texas," Calpine said in reporting earnings today.

"At both our Deer Park and Channel Energy Centers, we have the ability to install an additional combustion turbine generator and connect to the existing steam turbine generator to expand the capacity of these facilities and to improve the overall efficiency," Calpine reported.

"In September 2011, we filed an air permit application with the Texas Commission on Environmental Quality (TCEQ) and the EPA to expand the Deer Park Energy Center by approximately 275 MW. In November 2011, we filed similar permits with the TCEQ and the EPA to expand the Channel Energy Center by approximately 275 MW," Calpine said.

Calpine's announcement comes a day after the Texas House Committee on State Affairs held a hearing on ERCOT's resource adequacy, in which officials from the PUCT and ERCOT reiterated prior statements concerning this summer's outlook. If this summer repeats last year's extreme heat, Texas will need a repeat of last year's conservation, plus incremental conservation, to avoid rolling outages.

Rep. Byron Cook, chair of the committee, said that any action regarding resource adequacy would be within the current market framework.

Elsewhere, Calpine said that it was actively pursing a set of development options in PJM, including projects at:

• Garrison (Delaware): Actively permitting 618 MW of new combined-cycle capacity at a development site secured by a lease option with the City of Dover. PJM's system impact study for the first phase (309 MW) and the feasibility study for the second phase (309 MW) have been completed. Both studies are being reviewed internally. Environmental permitting, site development planning and development engineering are underway.

• Edge Moor (Delaware): A nominal 300 MW combined-cycle development project located at our Edge Moor facility which will leverage existing infrastructure. PJM is currently conducting a system impact study which will provide a detailed report on the project's interconnection costs.