Clock ticking on Sutter Energy Center contract talks
Apr 29, 2012 (Menafn - Appeal-Democrat - McClatchy-Tribune Information Services via COMTEX) --Officials with Sutter County and Calpine Inc. may be having a nervous weekend as the deadline for Sutter Energy Center to get a new contract to sell electricity approaches.
As of Monday, the plant will have passed a 30-day window approved last month by the state Public Utilities Commission to finalize a new contract with one or more of the state's three investor-owned facilities, a group that includes Pacific Gas & Electric Co.
As of Friday, Calpine was still in negotiations on a contract and couldn't comment further, confirmed Joe Ronan, a senior vice president with the company, in an email.
In a first-quarter earnings report released Friday, Calpine noted its west region had a 25 million drop in commodity margin in January through March, partially because the Sutter Energy Center didn't run during the quarter.
A lack of demand for electricity, largely attributed to the state's economic slowdown, led Calpine officials to warn earlier this year the plant could be closed without a contract.
Because of the resulting loss of jobs and the hit to the county's economy, Sutter County Supervisor Larry Munger and others have testified before the PUC to find a way to keep the plant operating.
"I just hope we do get something done," Munger said Friday, adding he hadn't been in recent contact with Calpine. "I'd imagine if they're trying to negotiate in good faith, they might get an extension to negotiate. We'll see."
But the PUC decision last month asked the utilities only to negotiate with Calpine, not finalize a contract, and gave both sides 30 days to do so, also with the provision the contracts wouldn't be worth more than 17.9 million.
In addition to PG&E, Southern California Edison Co. and San Diego Gas & Electric Co. were asked to negotiate.
The plant, which opened in 2001 on South Township Road, west of Yuba City, employs 26 people and generates more than 2.6 million in annual property tax.
Munger said the natural gas plant's troubles are particularly frustrating because its relative newness means it's cleaner than other plants with contracts. "Even the PUC knows it's a good plant," he said.
CONTACT Ben van der Meer at bvandermeer@appealdemocrat.com or 749-4786. Find him on Facebook at /ADbvandermeer or on Twitter at @ADbvandermeer.
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