EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.
UPDATE: PG&E ANNOUNCES LONG-TERM QF AGREEMENT WITH CALPINE CORPORATION
San Francisco ?Pacific
Gas and Electric Company today announced a five-year agreement with
Calpine Corporation's qualifying facilities (QFs), ensuring the
utility receives a reliable supply of power at an average energy
price of 5.37 cents per kilowatt-hour.
Under the terms of the deal,
Pacific Gas and Electric Company will assume the 13 Calpine QF contracts
and pay the approximately $265 million in pre-petition debt on the
effective date of a confirmed plan of reorganization.
Calpine's 13 QFs provide
an average of 450 megawatts of delivered power to the utility. By
locking into the fixed cost, Pacific Gas and Electric Company will
help protect its customers from the market fluctuations in the wholesale
market. A recent CPUC decision (D.01-06-015) allowed QFs to enter
into long-term contracts at an average energy price of 5.37 cents
"By insulating against volatile
natural gas prices, this agreement will help ensure our customers
receive a reliable source of power at reasonable prices over the
next five years," said Kent Harvey, Pacific Gas and Electric Company's
senior vice president and chief financial officer. "We believe this
plan can serve as a framework for ongoing discussions with our QFs."
Pacific Gas and Electric
Company is willing to enter into similar type agreements for any
of its other 300 QF contracts, and is currently in discussion with
some QFs. On June 29, the company filed a statement with the U.S.
Bankruptcy Court to make its final decision on whether to assume
or reject its QF contracts in coordination with the plan of reorganization.
Today's agreement with Calpine
is consistent with the filing because the payment of the past costs
will be made upon the effective date of the plan of reorganization.
A copy of the agreement will be filed with the U.S. Bankruptcy Court,
and a hearing on the issue is scheduled for July 12.