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) December 1, 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.
Edison's failure to make payments to the Coso partnerships, which led to an
uncollected amount of approximately $109 million for the period November 1, 2000
to March 26, 2001, was due to its liquidity crisis caused in large part by its
inability to pass through procurement costs to its ratepayers. As previously
disclosed, Edison entered into an agreement (the "Agreement") with the Coso
Partnerships on June 19, 2001, that addressed renewable energy pricing and
payment issues. The Agreement, which required consent or action on behalf of
certain governing authorities, confirmed the $109 million amount due to the Coso
Partnerships (such amount, the "Stipulated Amount") as well as terms for the
payment of interest at 7% per annum ("Interest") on the Stipulated Amount.
Under the terms of the Agreement, Edison paid 10% of the Stipulated Amount and
the required Interest on June 21, 2001. Additionally, Edison continues to pay
Interest monthly on the unpaid balance of the Stipulated Amount. Subsequent to
its execution, the California State Legislature failed to enact legislation to
implement the Agreement.
In November of 2000, Edison initiated litigation against the California Public
Utilities Commission ("CPUC"), seeking the right to recover all of its
non-reimbursed costs from ratepayers under the Federal Filed Rate Doctrine. In
October of 2001, Edison reached a settlement (the "Settlement") with the CPUC
which will allow them to recover all of their non-reimbursed procurement costs
from ratepayers over a period of time. Among other things, the Settlement was
designed to restore the creditworthiness of Edison as rapidly as reasonably
practical.
Following the Settlement on November 30, 2001, the Coso Partnerships and Edison
entered into an amendment to the Agreement (the "Amendment") to reset payment
terms for the balance of the Stipulated Amount and Interest owed to the Coso
Partnerships. The Amendment, which is subject to CPUC approval, also established
fixed energy rates. More specifically, the Amendment provides for the following:
* Continued interest payments until the outstanding balance of the Stipulated
Amount is paid in full;
* Final payment of the outstanding balance of the Stipulated Amount within
five (5) business days after the earlier occurs: (i) Edison's payment to
creditors exceeds a defined amount set forth in the Amendment; or (ii)
Edison obtains financing exceeding a certain level specified in the
Amendment; and
* Established May 1, 2002 as the date when the Coso Partnerships will begin
receiving a fixed Short Run Avoided Cost rate of 5.37 cents/kWh for five
(5) years.
While management of the Coso Partnerships has been involved in negotiating the
Amendment with Edison, there can be no assurance that approval will be granted
by the CPUC.
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: December 4, 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)