Posted on 01/16/2002 11:45:07 AM PST by Ernest_at_the_Beach
Edited on 07/19/2004 2:09:27 PM PDT by Jim Robinson. [history]
San Jose, California, Jan. 16 (Bloomberg) -- Calpine Corp., one of the biggest U.S. power-plant developers, said it will postpone $2 billion of projects because the weak economy hurt energy demand and will lead to a drop in earnings this year.
(Excerpt) Read more at quote.bloomberg.com ...
Click here: calpowercrisis
On the other hand, if Calpine doesn't build these new plants, don't they bail Gov. Goober out of his premium-priced long-term supply contracts?
As I recollect, the ridiculous contracts the state signed at the peak of the market were also contingent upon building new power plants inside the state.
Consequently, Calpine's move (if it is repeated by the other long-term contractors) gets the state off the hook for those inflated contracts Goober "negotiated".
Thus, Calpine's decision will probably help out the California taxpayer. A little.
But not the ratepayer. Since the PUC will still set prices based on the higher rate, so as to enable the state to earn enough revenues to float the energy bonds.
Tough beans, Ernest. Ya bin had...
Not necessarily. Calpine isn't stopping construction on all new plants. If they have contracts with California for delivering power at a certain price, presumably quite high in this case, those will probably be built anyway.
The economics of that would certainly be more attractive to them than building a plant in Texas, where the price they could get for power is quite low, at least for the moment.
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