Calpine, TVA in tolling pact for 770-MW Ala. plant

LOS ANGELES, Sept 6 (Reuters) - Calpine Corp. CPNLQ.PK and the federal Tennessee Valley Authority on Thursday announced a five-year tolling agreement for power produced at the 770-megawatt Decatur power plant in Alabama.

The bankrupt independent power producer will allow TVA to sell all output of the Decatur Energy Center and in return the TVA will supply the natural gas that the plant uses to make electricity.

The agreement became effective Sept. 1.

The Decatur plant came on line in 2002 and Calpine touts it as one of the cleanest in operation. The combined-cycle plant generates power 40 percent more efficiently than older plants, Calpine said.

Calpine last week reported a net loss of $27 million in July after posting a $1 million profit in June.

The San Jose, California-based company aims to emerge from bankruptcy by Jan. 31.

Calpine has about 24,600 megawatts in generating capacity. A megawatt can on average power about 800 homes. (Reporting by Bernie Woodall; editing by Christian Wiessner; email: bernard.woodall@reuters.com; Reuters Messaging: bernard.woodall.reuters.com@reuters.net; +1 213 955 6752)