SAN JOSE, Calif., May 22, 2003 — Calpine Corp. has completed the $82 million monetization of an existing power sales agreement with the Bonneville Power Administration (BPA).
This transaction represents another contract monetization completed by the company as a part of its 2003 liquidity-enhancing program.
Under the existing 100-megawatt fixed-price contract, Calpine delivers baseload power to BPA through December 31, 2006. As a part of the monetization transaction, the company entered into a contract with a third party to purchase power based on spot prices and a fixed-price swap agreement with an affiliate of Deutsche Bank to lock in the price of the purchased power. The term of both agreements is through December 31, 2006.
To complete the monetization, Calpine then entered into an agreement with an affiliate of Deutsche Bank and borrowed $82 million secured by the spread between the BPA contract and the fixed power purchases. Proceeds from the borrowing will be used to pay transaction expenses for plant construction and general corporate purposes. Calpine will make quarterly principal and interest payments on the loan that matures on December 31, 2006.
“Calpine benefits from this monetization in a couple of ways: We raised $82 million with this borrowing, and our open generation in the attractive western markets has been increased by 100 megawatts for the next several years,” stated Calpine’s Chief Financial Officer Bob Kelly. “To date, we have raised approximately $450 million towards our 2003 liquidity program goal of approximately $2.3 billion.”
“The BPA is an active participant in the evolving electricity markets in the West. We look forward to a strong relationship with this valued customer,” added Kelly.
Calpine Corp. is a North American power company dedicated to providing wholesale and industrial customers with clean, efficient, natural gas-fired and geothermal power generation and a full range of energy products and services. The company generates power at plants it owns or leases in 22 states in the United States, three provinces in Canada and in the United Kingdom. Calpine is also the world’s largest producer of renewable geothermal energy, and it owns approximately one trillion cubic feet equivalent of proved natural gas reserves in Canada and the United States. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information about Calpine, visit www.calpine.com.