GE Energy Financial Services, a unit of GE, has said that it is expanding its 26GW power portfolio with the acquisition of King City natural gas-fired cogeneration power plant in California's Salinas Valley for $68m.

GE is buying the ownership stake in the plant from Kelson Canada, a subsidiary of Harbinger Capital Partners. GE said that it knows the plant well because it has been providing a $47m loan to the project since 2003.

The King City plant, which is 75 miles southeast of Monterey, is an efficient 120MW natural gas-fired cogeneration facility using a GE 7EA gas turbine that entered commercial operation in 1989. The plant sells its electricity to Pacific Gas & Electric Company under a contract until 2019, and supplies steam to a nearby vegetable processing facility.

Calpine, a US- based power company, has leased, operated and maintained the plant since 1996 and will continue to do so under GE’s ownership.

Calpine and GE have worked together on several operating and in-development power projects, especially in Calpine’s core market of California. These include the Russell City Energy Center, the Inland Empire Energy Center, Pasadena Cogeneration, Metcalf Energy, the Otay Mesa Energy Center and the Fox Energy Center.

Alex Urquhart, president and CEO of GE Energy Financial Services, said: “Our acquisition of the King City Cogeneration Plant underscores our strategy of growing our power portfolio across a wide range of generation technologies and fuel sources, participating in the industry using a wide range of capital products and structures, and deepening our relationships with key customers and partners such as Calpine.”