Back in July 2002 I posted a message about Calpine's expensive long term contracts, and looks like we are going to get fooled again.
The average prices per MWh:
1999 $33
2000 $114
2001 $118
2002 $41
Calpine LT contract price $59.

So much for the benefits of independent power producers. They negotiated long term contracts that were real sweetheart deals for Calpine , see below. Now they are in chapter 11 and there is mention in the SJMN of cancelling contracts and raising prices, and PG&E (you and me) buying gas for Calpine to burn.

Here is a blast from the past on the sanctity of contracts:

Governor wants to cut costs of power
Tough sell for Davis as suppliers balk
By Steve Geissinger
SACRAMENTO BUREAU

"If the politicians were to make all these contracts go away, ... who the hell is going to meet with the state and negotiate any (new) contracts?" asked Peter Cartwright, president of San Jose-based Calpine Corp., a major supplier of California power. We're not going to say no. We'd certainly sit down at the table with them and say, 'Let's see, maybe we can do this, maybe we can do that,'" said Calpine's Cartwright.

If state officials simply broke some of their contracts, not only would penalties be "very, very severe," but also "they would have completely blown their credibility, and no one would negotiate with them," Cartwright said.

His comments coincided with reports that Calpine's third-quarter profits more than doubled, despite a sharp drop in short-term electricity prices in California, one of its main markets. Analysts said Calpine's performance can be largely attributed to its long-term contracts with the state.

http://www.oaklandtribune.com/default.asp?puid=490&spuid=490&in dx=1174760&article=on

And this:

Calpine Benefiting From California Energy Crisis, Official Says
By Daniel Taub

San Jose, California, Aug. 28 (Bloomberg) -- Calpine Corp., a California power producer, has benefited from the state's energy crisis by locking in ``very favorable margins'' on long-term electricity sales, Senior Vice President James Macias said.

The long-term contracts have an average ``spark spread,'' or the difference between revenue and the cost of fuel to generate the electricity, of $26.50 a megawatt-hour, Macias said.

http://www.southsanjose.com/viewmessage.php?MessageID=4&TopicID=39&MessageNumber=2305