While the plant was deemed "necessary" by politicians, a long run of low wholesale electricity prices had made the company cautious about new construction.

"We're not moving into new construction of plants without power purchasing contracts. Russell City is no different," said Calpine spokesman Kent Robertson. "Current market conditions are an obstacle to construction at this time."

The company said earlier this year that it would delay construction of about three dozen plants nationwide in an effort to reduce spending and debt levels, and in light of a bearish power market.