OREANDA-NEWS.  Calpine Corporation (NYSE:CPN) today announced that it has agreed to sell the Mankato Power Plant, a 375 MW natural gas-fired, combined-cycle power plant located in Minnesota, to Southern Company subsidiary Southern Power for $395.5 million plus working capital and other customary purchase price adjustments.

“Mankato is a modern, efficient and well-performing plant under long-term contract to the local utility and with an expansion in advanced development. This sale is another step in our capital allocation plan to divest plants in non-core regions when we see an attractive value opportunity,” said Calpine President and CEO Thad Hill. “I would like to thank our Mankato team for their professionalism and commitment to operational excellence over the years.”

Mankato provides electricity to Northern States Power, a subsidiary of Xcel Energy Inc., through July 2026, pursuant to a tolling agreement. In addition, a 345 MW expansion is currently in advanced development to serve a 20-year tolling agreement with Northern States Power. A natural gas-fired combustion turbine and a heat recovery steam generator will be added, with the incremental steam increasing the power production of the plant’s existing steam turbine and improving the overall efficiency of the plant. Commercial operation of the expanded capacity is expected by June 2019.

Calpine expects to redeploy the proceeds of the sale toward corporate debt reduction and other corporate purposes. The transaction is projected to close in the fourth quarter of 2016, subject to customary closing conditions, antitrust review under the Hart-Scott-Rodino Act and approval from the Federal Energy Regulation Commission.

About Calpine

Calpine Corporation is America’s largest generator of electricity from natural gas and geothermal resources. Our fleet of 84 power plants in operation or under construction represents more than 27,000 megawatts of generation capacity. Through wholesale power operations and our retail business, Champion Energy, we serve customers in 21 states and Canada. We specialize in developing, constructing, owning and operating natural gas-fired and renewable geothermal power plants that use advanced technologies to generate power in a low-carbon and environmentally responsible manner. Our clean, efficient, modern and flexible fleet is uniquely positioned to benefit from the secular trends affecting our industry, including the abundant and affordable supply of clean natural gas, stricter environmental regulation, aging power generation infrastructure and the increasing need for dispatchable power plants to successfully integrate intermittent renewables into the grid.