Centrica enters into further agreement with Drax

Centrica plc announced it has entered into a further agreement with Drax Group plc (“Drax”), providing Centrica with access to an additional 300MW of baseload power. The agreement will run for a five year period from October 2010.

Under the terms of the agreement, similar to the existing 600MW supply contract which commenced in October 2007, Drax will supply power to Centrica at a price set with reference to international coal prices and agreed fixed clean dark spreads, while Centrica will deliver matching carbon allowances.

The agreement, which secures additional volumes of coal-indexed power, is in line with Centrica’s strategy to ensure secure energy supplies for its customers and to diversify its fuel mix, further reducing its overall exposure to the gas price in the UK.