UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 31, 2005
CALPINE CORPORATION
(A Delaware Corporation)
Commission file number: 001-12079
I.R.S. Employer Identification No. 77-0212977
50 West San Fernando Street
San Jose, California 95113
Telephone: (408) 995-5115
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01 -- OTHER EVENTS
On March 31, 2005, Deer Park Energy Center Limited Partnership, an indirect
wholly-owned subsidiary of Calpine Corporation, signed a 650-megawatt, six-year
power sales agreement with Merrill Lynch Commodities, Inc. Under the power sales
agreement, Deer Park has received approximately $195 million, net of fees and
expenses, as an upfront payment for future power deliveries. Deer Park expects
to receive approximately $70 million in additional payments over the next
several months upon satisfying certain conditions under the power sales
agreement, resulting in net upfront payments to Deer Park totaling approximately
$265 million. Deer Park has also arranged to purchase natural gas from Merrill
Lynch Commodities, Inc. over the term of the power sales agreement, which will
reduce the working capital required to secure a long-term fuel supply for the
facility.
Deliveries under the power sales agreement began on April 1, 2005 and will
continue through December 31, 2010. Deer Park's obligations are secured by a
lien on the Deer Park Energy Center and some of its related assets. It is
expected that the upfront payments received by Deer Park in connection with this
transaction will be distributed by Deer Park to Calpine Corporation and then
used by Calpine Corporation for general corporate purposes.
A copy of the press release relating to the power sales agreement is
attached as Exhibit 99.1 hereto.
ITEM 9.01 -- FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
Not Applicable
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits.
99.1. Press release, dated April 1, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALPINE CORPORATION
By: /s/ Charles B. Clark, Jr.
------------------------------------
Charles B. Clark, Jr.
Senior Vice President, Controller and
Chief Accounting Officer
Date: April 13, 2005
EXHIBIT 99.1.
NEWS RELEASE
CONTACTS: (408) 995-5115
Media Relations: Bill Highlander, Ext. 1244
Investor Relations: Karen Bunton, Ext. 1121
Deer Park Energy Center Signs Power Sales Agreement
With Merrill Lynch Commodities, Inc.
(SAN JOSE, Calif.) /PR Newswire - First Call/ April 1, 2005 - Calpine
Corporation's [NYSE:CPN] Deer Park Energy Center has signed a 650-megawatt,
six-year power sales agreement with Merrill Lynch Commodities, Inc. As part of
this agreement, Deer Park has received approximately $195 million, net of fees
and expenses, as an upfront payment for future power deliveries under this
contract. Deer Park expects to receive approximately $70 million in additional
payments over the next several months upon satisfying certain conditions under
the power sales agreement, resulting in net upfront payments to Deer Park
totaling approximately $265 million. Deer Park has also arranged to purchase
natural gas from Merrill Lynch over the term of the power sales agreement, which
will reduce the working capital required to secure a long-term fuel supply for
the facility.
"This transaction helps Calpine to achieve its risk management and
liquidity goals," stated Bob Kelly, Calpine chief financial officer. "The
agreement enables us to lock in fixed prices on a long-term contract with a
creditworthy counterparty while enhancing our liquidity by realizing some of the
value of this contract on an accelerated basis."
Deliveries under the power sales agreement will begin on April 1, 2005 and
continue through December 31, 2010. Deer Park's obligations are secured by a
lien on the Deer Park Energy Center and some of its related assets. It is
expected that the upfront payments received by Deer Park in connection with this
transaction will be distributed by Deer Park to Calpine Corporation and then
used by Calpine for general corporate purposes.
The Deer Park Energy Center is a 1,019-megawatt natural gas-fired
combined-cycle power plant located on the Houston Ship Channel east of Houston,
Texas. Deer Park also provides steam to the adjacent joint Shell Deer Park Oil
Refining Company and Shell Chemical LP manufacturing facility. In May 2004, the
Deer Park Energy Center was recognized for its "leadership in energy supply"
with a 2003 Energy Star(R) Combined Heat and Power Award from the U.S.
Environmental Protection Agency and the U.S. Department of Energy.
A major power company, Calpine Corporation supplies customers and
communities with electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates integrated systems of
plants in 21 U.S. states, three Canadian provinces and the United Kingdom. Its
customized products and services include wholesale and retail electricity,
natural gas, gas turbine components and services, energy management, and a wide
range of power plant engineering, construction and operations services. Calpine
was founded in 1984. It is included in the S&P 500 Index and is publicly traded
on the New York Stock Exchange under the symbol CPN. For more information, visit
http://www.calpine.com.
This news release discusses certain matters that may be considered
"forward-looking" statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, including statements regarding the intent, belief or current
expectations of Calpine Corporation ("the Company") and its management.
Prospective investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve a number of risks and
uncertainties that could materially affect actual results such as, but not
limited to, (i) the timing and extent of deregulation of energy markets and the
rules and regulations adopted on a transitional basis with respect thereto; (ii)
the timing and extent of changes in commodity prices for energy, particularly
natural gas and electricity; (iii) commercial operations of new plants that may
be delayed or prevented because of various development and construction risks,
such as a failure to obtain the necessary permits to operate, failure of
third-party contractors to perform their contractual obligations or failure to
obtain financing on acceptable terms; (iv) unscheduled outages of operating
plants; (v) a competitor's development of lower cost generating gas-fired power
plants; (vi) risks associated with marketing and selling power from power plants
in the newly-competitive energy market; (vii) the successful exploitation of an
oil or gas resource that ultimately depends upon the geology of the resource,
the total amount and costs to develop recoverable reserves and operations
factors relating to the extraction of natural gas; (viii) the effects on the
Company's business resulting from reduced liquidity in the trading and power
industry; (ix) the Company's ability to access the capital markets or obtain
bank financing on attractive terms; (x) the direct or indirect effects on the
Company's business of a lowering of its credit rating (or actions it may take in
response to changing credit rating criteria), including, increased collateral
requirements, refusal by the Company's current or potential counterparties to
enter into transactions with it and its inability to obtain credit or capital in
desired amounts or on favorable terms; and (xi) other risks identified from
time-to-time in the Company's reports and registration statements filed with the
SEC, including the risk factors identified in its Annual Report on Form 10-K for
the year ended December 31, 2004 , which can also be found on the Company's
website at www.calpine.com. All information set forth in this news release is as
of today's date, and the Company undertakes no duty to update this information.