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) June 28, 2001
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Caithness Coso Funding Corp.
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(Exact name of registrant as specified in its charter)
Delaware 333-83815 94-3328762
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Coso Finance Partners California 68-0133679
Coso Energy Developers California 94-3071296
Coso Power Developers California 94-3102796
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(Exact names of Registrants as (State or other (IRS Employer
specified in their charters) jurisdiction of Identification No.)
incorporation)
1114 Avenue of the Americas, 41st Floor, New York, New York 10036-7790
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 921-9099
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Not Applicable
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(Former name or former address, if changed since last report.)
Item 5. Other Events.
The Coso projects consist of three 80 MW geothermal power plants, called
Navy I, BLM and Navy II (together, the "Coso Partnerships"), their transmission
lines, wells, gathering system and other related facilities. The Coso projects
are located near one another in the Mojave Desert approximately 150 miles
northeast of Los Angeles, California, and have been generating electricity since
the late 1980's. The Coso Partnerships sell 100% of the electrical energy
generated at the plants to Southern California Edison ("Edison") under three
long-term Standard Offer No. 4 power purchase agreements.
Caithness Coso Funding Corp. ("Funding Corp.") is a single-purpose Delaware
Corporation formed to issue senior secured notes ("Notes") for its own account
and as an agent acting on behalf of the Coso Partnerships. On May 28, 1999,
Funding Corp. sold $413,000,000 of senior secured notes. Pursuant to separate
credit agreements between Funding Corp. and each partnership, the net proceeds
from the offering of the Notes were loaned to the Coso Partnerships. Payment of
the Notes is provided for by payments made by the Coso Partnerships to Funding
Corp. under their respective project loans. Funding Corp. has no material
assets, other than the project loans, and does not conduct any operations apart
from issuing the Notes and making the project loans to the partnerships.
On January 16, 2001 Edison announced that it was temporarily suspending
energy payments to the Coso Partnerships pending a solution to its liquidity
crisis. Edison's failure to make payments to the Coso Partnerships for energy
delivered from November 2000 through March 26, 2001 has led to an uncollected
amount of approximately $109 million. On June 19, 2001, Edison entered into an
agreement (the "Agreement") with the Coso Partnerships, along with other
Qualifying Facilities, that addresses renewable energy pricing and payment
issues. The Agreement confirms the $109 million as the amount due to the Coso
Partnerships (such amount, the "Stipulated Amount") as well as terms for the
payment of interest ("Interest") on the Stipulated Amount. More specifically,
the Agreement calls for the following:
* Payment of 10% of the Stipulated Amount plus Interest on the entire
Stipulated Amount within three (3) business days (which has been received);
* Continued monthly Interest payments going forward at 7% per annum;
* Payment of 10% of the Stipulated Amount within five (5) business days after
the Memorandum of Understanding ("MOU") between Edison and the California
Department of Water Resources has been implemented by appropriate
legislation and orders issued by the California Public Utilities Commission
("CPUC");
* Final payment of the remaining Stipulated Amount plus accrued Interest
within five (5) business days after Edison receives proceeds from the first
financing resulting from the MOU or other legislative mechanism designed to
restore Edison's creditworthiness;
* After final payment of the Stipulated Amount, establishes an average Short
Run Avoided Cost ("SRAC") of 5.37 cents/kWh for energy sales to Edison for
the next five (5) years (the "Fixed Price Period").
The Coso Partnerships believe that the Agreement and resulting governmental
initiatives that implement the MOU, if enacted, will provide stability for
Edison and substantially mitigate uncertainties relating to payment and pricing.
Some provisions of the Agreement require consent or action on behalf of
certain governing authorities including the CPUC, the Legislature and Governor
of the State of California. While management of the Coso Partnerships, as well
as other power generators, have been involved in negotiations with Edison and
various governing authorities, there can be no assurance that the Agreement will
achieve the required consensus of those governing authorities, nor as to when
such consensus may occur.
Certain information included in this report contains forward-looking
statements made pursuant to the Private Securities Litigation Reform act of 1995
("Reform Act"). Such statements are based on current expectations and involve a
number of known and unknown risks and uncertainties that could cause the actual
results and performance of the Coso Partnerships to differ materially from any
expected future results or performance, expressed or implied, by the
forward-looking statements including expectations regarding the future results
of operations of the Coso Partnerships. In connection with the safe harbor
provisions of the Reform Act, the Coso Partnerships have identified important
factors that could cause actual results to differ materially from such
expectations, including resolution of the energy crisis in California, operating
uncertainty, uncertainties relating to geothermal resources, uncertainties
relating to economic and political conditions and uncertainties regarding the
impact of regulations, changes in government policy, industry deregulation and
competition. Reference is made to all of the Registrants' SEC filings,
incorporated herein by reference, for a description of such factors. The
Registrants assume no responsibility to update forward-looking information
contained herein.
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 thereunto duly authorized.
Date: June 28, 2001 CAITHNESS COSO FUNDING CORP.,
a Delaware corporation
By: /S/ CHRISTOPHER T. MCCALLION
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Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
COSO FINANCE PARTNERS
a California general partnership
By: New CLOC Company, LLC,
its Managing General Partner
By: /S/ CHRISTOPHER T. MCCALLION
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Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
COSO ENERGY DEVELOPERS
a California general partnership
By: New CHIP Company, LLC,
its Managing General Partner
By: /S/ CHRISTOPHER T. MCCALLION
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Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
COSO POWER DEVELOPERS
a California general partnership
By: New CTC Company, LLC,
its Managing General Partner
By: /S/ CHRISTOPHER T. MCCALLION
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Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)