SAN FRANCISCO -(Dow Jones)- PG&E Corp.'s (PCG) utility unit said Friday that it signed a contract with Calpine Corp. (CPN) to buy 425 megawatts of geothermal power from Calpine's Geysers facility in northern California.
The new contract, subject to approval by state regulators, will replace two existing contracts between Pacific Gas & Electric Co. and Calpine for 375 megawatts of geothermal power from the facility that expire in 2012 and 2014.
In addition to the 425-megawatt contract, Calpine said Friday that it renewed a separate geothermal power contract with PG&E for 250 megawatts.
PG&E and other California utiliites are required to use renewable sources for a third of the power they sell by 2020 under rules being developed as part of California's 2006 plan to combat climate change. Existing rules require the state's utilities to use renewables for a fifth of their retail power by the end next year.
Shares of PG&E recently traded 2 cents lower at $41.33, and Calpine shares were up 30 cents at $11.12.
-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@ dowjones.com
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