July 24 2002 – Independent power producer Calpine Corp. said on Wednesday it began power operations at its 1000 MW Freestone Energy Centre in North Texas.

In a statement, Calpine said its plant, which should generate enough electricity for about a million Texas homes, will provide the North Texas market with its own generation, easing transmission problems in the area caused by a lack of lines from the southern part of the state.

One MW of electricity is enough to power about 1000 homes. The gas-fired plant, in Fairfield, Texas, about 80 miles southeast of Dallas, is the San Jose, California-based company’s ninth facility in Texas.

Calpine declined to disclose the cost of the plant, but company spokeswoman Gail Peterson said Calpine has two more facilities totaling another 1522 MW currently in development in the state.

Calpine is one of several companies in the power sector whose shares have plummeted recently, hurt by earnings warnings issued by key industry players. The entire power sector has been hit by a sharp drop in electricity prices linked to the economic downturn and fallout from the collapse of industry leader Enron Corp.

Energy industry analysts have also raised questions about the need for more power plants in Texas, where a surge in new plant construction is putting pressure on power prices in what many are calling an oversupplied market. Others, however, caution that the surplus will taper off in the near future as older, less efficient plants are retired and fewer new plants are built.

The Freestone plant consists of four natural gas-fired combustion turbines in combination with two steam turbines. Combined-cycle plants burn fuel in a standard combustion turbine, then route excess heat or waste gas to a heat recovery boiler to generate steam. The steam is then sent through a turbine to produce additional electricity, improving the unit’s overall generating efficiency.

Calpine’s Texas power plants generate enough electricity annually to power 4.1m homes, the company said.