UPDATE: Mirant In Pact To Sell New Calif Plant's Power To PG&E

Mirant Corp. (MIR) said Thursday it signed a 10-year contract with PG&E Corp. (PCG) unit Pacific Gas & Electric Co. to sell power from a natural gas-fired power plant under development in northern California.

"We are very pleased to be adding new generating capacity in California," said Edward R. Muller, Mirant's chairman and chief executive.

PG&E spokeswoman Jennifer Zerwer confirmed that PG&E signed the contract with Mirant, but declined to provide any details pending an application associated with the contract that the San Francisco utility plans to file with state regulators "within the next couple of months."

Mirant said it plans to deliver all the output from its planned 760-megawatt Marsh Landing gas-fired power plant in Antioch, Calif., to PG&E, as early as May 2013.

The contract is the result of a "request for offers" PG&E issued in April 2008 seeking 800 to 1,200 megawatts of baseload power that would be available by May 2015.

Mirant said it plans to start construction next year, assuming it receives a required permit from the California Energy Commission. Mirant's application to build the plant is still pending at the CEC.

Shares of Mirant were trading 29 cents higher at $16.25 apiece after-hours; PG&E shares closed 19 cents higher at $40.14 and were unchanged after hours.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; [e-mail]

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