Calpine Corporation and Safeway Inc have agreed to expand and extend the terms of their retail power sales contract. The new agreement stipulates the delivery of approximately 130-megawatts, a 20-megawatt increase, and extends the term of the existing contract one additional year through to mid-2008.

The newly expanded Safeway contract, which is Calpine’s biggest retail deal in California, will facilitate energy deliveries to more than 400 Safeway locations throughout the Pacific coast state. Moreover, in an increasing environmentally-conscious world, Calpine will supply Safeway with a blend of both traditionally sourced energy and renewable energy from its Geysers geothermal operation.

Calpine is one of the largest energy producers in the US and, to help facilitate its new deal with Safeway, the company is about to complete construction of two power plants, Pastoria and Metcalf. The additional power facilities will increase Calpine’s California project portfolio to 41 power plants totaling more than 5,250 megawatts.

We are pleased to have such a well respected customer as Safeway and are gratified that they are extending and expanding our relationship, Curt Hildebrand, Calpine’s senior vice president of marketing and sales said.