Xcel Energy and Calpine Corp. announced on Monday that Public Service Company of Colorado, an Xcel Energy company, will purchase two of Calpine’s power plants near Denver that currently provide power to the utility under power purchase agreements.

The $739 million acquisition resulted from an offer by Calpine into a competitive bid process that was part of Xcel Energy’s 2007 Colorado Resource Plan and was the least-cost option among many bids for needed generating resources. The agreement is dependent on regulatory agency approval.

The plants to be purchased are the 621-MW Rocky Mountain Energy Center, located near Hudson, Colo., which began commercial operation in 2004 and produces electricity using combined-cycle technology, and the 310-MW simple-cycle Blue Spruce Energy Center, located in Aurora, Colo., which began operation in 2003.

"This agreement will be good for our customers because these assets, which are already an integral part of our system, will continue to provide reliable and reasonably priced energy for many years," David Eves, president and CEO of Public Service Company of Colorado said on Monday. "Knowing that these plants will be part of our long-term generation mix will also help us to more effectively manage system reliability as we strive to meet the state’s newly increased renewable energy standard."

Sources: Calpine Corporation, Xcel Energy