US power company Calpine has agreed to buy a fleet of power plants from Holdings Conectiv Energy for $1.65bn.

The 4490MW capacity fleet includes 18 operating power plants and one 565MW plant under construction, primarily comprising of natural gas-fire plants and renewable generation.

Calpine said it plans to convert two of the coal-fired plants to run on gas.

Calpine said it plans to strategically enter the Mid-Atlantic region and provide access to the PJM East market.

The estimated proceeds from the sale, liquidation and collateral will provide Pepco with about $2.05bn, which the firm will use for debt reduction.

The sale does not include Conectiv Energy’s load service supply contracts, energy hedging portfolio, certain tolling agreements and several other non-core assets.

The deal is expected to close by 30 June 2010, subject to approvals.