Calpine Corporation, the Californian-based independent power company, today announced it has agreed the basis on which Californian utility PG&E will repay monies owed to Calpine for power deliveries made to PG&E during the period of December 1, 2000 through April 6, 2001. PG&E owe Calpine approximately $265m, plus interest.
The agreement, which is subject to the approval of the bankruptcy court, requires PG&E to make monthly payments starting in December. The arrangement will continue until the earlier of November 30, 2002, or the date when PG&E’s plan of reorganization becomes effective.
PG&E will have to pay interest of five per cent from the initial default dates of Calpine’s Qualifying Facility (QF) contracts. Interest will continue to accrue on outstanding principal at this rate until PG&E has paid Calpine in full.
Calpine sells power to PG&E under the terms of long-term QF contracts at eleven facilities, representing nearly 600 MW of electricity for northern California power customers.