Calpine has reached an agreement with Siemens Westinghouse to restructure its long-term turbine servicing arrangements. The move comes as part of the power provider's strategic initiative to reduce operating expenses and improve power plant performance.
The cost cutting restructuring will cover Calpine’s fleet of Siemens F- and G-class gas turbines and eight Siemens steam turbines, representing more than 12,000 megawatts of capacity. Working with Siemens, Calpine expects to retrofit its Siemens turbine portfolio over the next 18 months to maximize the availability of its power plant fleet.
Furthermore, the restructuring includes a five-year arrangement to purchase Siemens parts and services, provides greater operating and turbine maintenance flexibility, and enhances Calpine’s position as a cost-competitive power producer. It also resolves outstanding issues between the companies, and offers extended warranties for Calpine turbines in construction and in storage.
The new arrangements with Siemens are in line with Calpine’s current strategic drive to reduce costs by divesting non-core assets and by increasing efficiency and profitability at its remaining facilities. The company is currently evaluating its remaining agreements and expects to complete this process by the end of 2005.
About half of Calpine’s plants are powered by Siemens’ units, said Tom Mason, president of Calpine Power Company. With their continued support, Calpine will benefit from greater optionality to enhance its operations and maintenance capabilities and improve plant reliability in today’s competitive power market.