Calpine Starts Work on Texas Power Plant

Calpine Corp. said it will begin construction today on a $150-million power plant on the Houston Ship Channel in Pasadena, Texas. The San Jose-based power producer said the natural-gas-fired plant will produce 240 megawatts of electricity and sell 90 megawatts to a Phillips Petroleum Co. chemical complex on the channel, plus the excess steam generated by the plant. Calpine plans to sell the remaining electricity to other customers under a variety of contracts. “Merchant power plants” differ from existing cogeneration plants--which generate electricity and steam for a specific industrial customer--and independent power producers, which sell their electricity to monopoly utilities under long-term contracts. Other forms of retail electricity sales are still illegal in Texas, although the Legislature is considering opening the market this year.