Calpine to Acquire Texas Power Plant

Calpine Corporation this morning announced that it has agreed to purchase a nominal 1,050 megawatt, combined-cycle power plant for $625 million, or approximately $595 per kilowatt, exclusive of adjustments relating to development rights and working capital, from MinnTex Power Holdings, LLC, a portfolio company owned by a private investment fund managed by Wayzata Investment Partners LLC.

The natural gas-fired plant is located in Guadalupe County, 30 miles northeast of San Antonio, Texas.

"We strongly believe in the potential of the Texas market as electric demand increases and reserve margins tighten. Acquiring this modern, flexible and efficient plant in ERCOT's south zone at a discount to replacement cost furthers our strategic objectives in this key market," said Calpine's Chief Executive Officer Jack Fusco.

The Guadalupe plant includes two 525 megawatt generation blocks, each consisting of two GE 7FA combustion turbines, two heat recovery steam generators and one GE steam turbine. In addition, the purchase includes rights to an advanced development opportunity for an approximately 400 megawatt quick-start, natural gas-fired peaker, "if market conditions warrant," Calpine said.

Calpine is targeting a transaction close in the first quarter of 2014 and expects to fund the transaction with cash on hand. The transaction is subject to customary closing conditions, antitrust review under the Hart-Scott-Rodino Act, and approval by the Public Utility Commission of Texas.