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Enron Mail |
----- Forwarded by Elizabeth Sager/HOU/ECT on 04/09/2001 04:08 PM -----
Michael Tribolet/ENRON@enronXgate 04/09/2001 03:45 PM To: Travis McCullough/HOU/ECT@ECT, Elizabeth Sager/HOU/ECT@ECT cc: jklauber@llgm.com@SMTP@enronXgate Subject: Calipine article Monday April 9, 2:52 pm Eastern Time Calpine says PG&E in breach of power contracts (UPDATE: updates with company comments to analysts) SAN JOSE, Calif., April 9 (Reuters) - Independent power company Calpine Corp. (NYSE:CPN <http://finance.yahoo.com/q?s=cpn&;d=t< - news </n/c/cpn.html<) said on Monday that bankrupt utility Pacific Gas and Electric was in breach of contract after failing to make some $267 million in payments and it would seek prompt court action to secure payment or be freed from its energy contracts. ADVERTISEMENT <http://rd.yahoo.com/M=183981.1387645.2975805.1320407/D=fin/S=7811756:LREC/A=6 31358/R=0/*http://www.hrblock.com/taxes/partners/yahoo/index.html < <http://rd.yahoo.com/M=183981.1387645.2975805.1320407/D=fin/S=7811756:LREC/A=6 31358/R=0/*http://www.hrblock.com/taxes/partners/yahoo/index.html < ``Right now there is breach of contract'' for power Calpine has provided Pacific Gas and Electric, Calpine senior vice president Lisa Bodensteiner told an analysts teleconference. ``We are filing motions this week with the bankruptcy court to direct PG&E to pay us. If it doesn't decide this, we will then ask the court to relieve of us of our contacts and let us sell to the open market,'' she said. San Jose, Calif.-based Calpine said in a statement earlier Monday it was confident PG&E would be able to pay Calpine's 11 qualifying facility subsidiaries (QFs) for past-due power sales. Calpine's 11 QF plants, which generate around 600 megawatts of power from small natural gas-fired and geothermal plants, are part of a fleet of qualifying facilities that can produce up to about a third of all the power generated in California. As of March 31, Pacific Gas and Electric owed a total of $643 million for power the QFs have supplied to its customers, according to the California Public Utilities. PG&E must assume Calpine's contracts in its bankruptcy proceedings for them to continue, Calpine said. PG&E Corp. (NYSE:PCG <http://finance.yahoo.com/q?s=pcg&;d=t< - news </n/p/pcg.html<) unit Pacific Gas and Electric Co., California's largest inverstor-owned utility, filed for Chapter 11 bankruptcy protection on Friday after piling up around $9 billion in wholesale power costs it has not been able to recover due to California's 1996 deregulation legislation. Calpine senior vice president Jim Macias told analysts that if PG&E ``were dumb enough'' not to affirm the contracts, Calpine could make an extra $380 million selling the energy tied up in its QF contracts with PG&E on the open spot market. ``We are in constant discussions with state municipal utilities and the state to sell our power. We are very confident we will be able to move this energy should the contacts be rejected,'' Macias said. He estimated spot electricity prices in the state are currently about $260 per megawatt hour. A Calpine spokeswoman said Monday the company's QF facilities operated when California declared power emergencies, but could not comment on whether they operate when an alert is not called. In addition to the $267 million currently owed, San Francisco-based Calpine also holds a long-term $68 million note receivable with PG&E for energy deliveries from 2003 to 2014, but that the note is note yet due. Calpine, which said it did not expect the $267 million PG&E owes it to grow, said the utility had paid 15 percent of what PG&E owes it for energy delivered in December and January, but had not paid anything since. Calpine, which has its own natural gas storage reserves in Sacramento, Calif., also said it expected to make payments to its gas suppliers.
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